Guide to Shared Ownership

What is Shared Ownership?

Shared Ownership makes it possible to buy a property that otherwise would not have been affordable.

  • It is a government-backed scheme for people who are unable to afford to buy a home at full market value (household income limits apply).
  • It is a part buy/part rent scheme. You buy a share in the property and pay rent on the share you don’t own.
  • It is a low-cost home ownership product launched by the government in April 2006 under the HomeBuy brand.

Why buy through Shared Ownership?

The Shared Ownership product helps many first time buyers get a foot on the housing ladder.

Buying a home in the current market is very difficult for many people. Shared Ownership makes it possible to buy a property which otherwise would not have been affordable. You can usually buy an initial share of 30% to 75% of the value of a property, and you’ll need to take out a mortgage to pay for your share of the home’s purchase price. You will then pay a subsidised rent on the share you don’t buy, and there will also be a monthly service charge payable.

Mettle&Poise Shared Ownership show home - bedroom

Why buy with Peabody?

  • We help hundreds of people buy a home of their own each year, so we have lots of experience.
  • We offer an excellent service before, during and after your purchase. 
  • We work with many national house builders and local contractors, building high quality homes in popular areas. All of our newly built homes come with a National House Building Council (NHBC) warranty or equivalent.
  • We charge subsidised rents, so our homes are more affordable for you. 
  • We work hard to keep your costs low. 
  • We aim to sell to first time buyers who are able to afford the cost of Shared Ownership but unable to buy a suitable home by any other means. Household income requirements differ from scheme to scheme and reflect current house prices, equities for sale and in certain instances local authority policy.

When I buy through Shared Ownership, what am I buying?

Shared Ownership is a part buy/part rent scheme. It is part funded by the government and aims to help first time buyers. It is designed as a stepping stone to completely owning your own home, allowing you to buy further shares in your property (which is called Staircasing) when you can afford to.

Buying through Shared Ownership makes you an owner-occupier, not a part tenant. You start off buying a share in your new home on a 125 year lease. Your lease is a legal document that proves you own part of your home.

Since you will own a lease you will be a “Leaseholder” and we will be what is known as the “Landlord”. You will have the same rights and responsibilities as a full owner-occupier.

If you decide to buy the remaining share of your home, you will then own your home outright. Your solicitor will arrange for the freehold to be transferred to you like any other house owner. If you own an apartment, you’ll remain a Leaseholder like any other apartment owner. This is because your home is in a block of apartments and your lease sets out responsibilities for use and maintenance of all shared areas.

If you become a full owner of an apartment you will still be responsible for the ground rent and service charge, which includes the buildings insurance.

If you become a full owner of a house you may still be required to pay an estate charge if you are living in a development with shared maintenance areas. You will also need to arrange your own buildings insurance, as this will not be covered by the service charge.