What is Shared Ownership?
Shared Ownership is a government scheme that allows people with smaller deposits (and who might have a lower annual income) to take their first step onto the housing ladder.
The idea is that you only buy a portion of the property – for example, 20%. This means that you won’t need to save such a big deposit. You then pay mortgage repayments on the part of the property that you own and reduced rent on the part you don’t, which is usually owned by a housing association.
Read more in our guide to Shared Ownership.
Am I eligible for Shared Ownership?
If you’re thinking about buying a Shared Ownership property, the first thing to do is determine is whether you’re eligible.
The basic criteria is:
You must be at least 18 years old.
Your household income must be less than £80k (£90k if buying in London). There is no set minimum income but the housing association might have their own lower threshold. Bear in mind that any money from benefits will not be counted towards your household income.
You don’t necessarily need to be a First Time Buyer, but you can’t own another home at the same time. If you do, you’ll need to show it’s up for sale and that it’s unsuitable for your current needs. It must be sold by the time you exchange contracts on your new home.
You must be unable to buy a home that suits your needs without the help of a scheme.
You must be able to demonstrate that you’re not in mortgage or rent arrears.
You must have a good credit score, and you must be able to show that you can afford the regular payments and costs that will be involved (e.g. rent, mortgage payments, service charge).
You must have access to a specified sum of money in order to pay legal fees – the exact amount will vary but will usually be around £4k.
You must meet all of the above criteria. The housing association might also have some additional conditions – you should ask them or the estate agent if you’re not sure.
Affordable homes programme eligibility
As of April 2021, the vast majority of rental homes delivered through the new Affordable Homes Programme also have a right to shared ownership. Though tennants in these homes must meet certain elegilbility requirements in order to become shared owners.
To be eligible they:
- Must have lived in the property for at least 12 months & been a social tennant for at least 3 years.
- Must have a maximum household income of £80,000 or less (£90,000 in London).
- Will be required to undertake an affordability assessment to prove they can afford to own a home.
- Must not be going through bankruptcy procedings
Am I eligible for Shared Ownership if I’m self-employed?
If you’re self-employed you’ll need to show at least three years of your accounts to prove that you’re a safe bet. If your income varies considerably it might be a good idea to seek financial advice before borrowing money or committing to owning a home.
Is Shared Ownership right for me?
Being eligible is one thing, but you also need to think about whether Shared Ownership is right for you. If you’re only able to save up a small deposit but you want the security of owning your own home, then it could be perfect. But if you’re looking for a property you can customise, or if you don’t want to commit to living in a property long-term, there might be a better option.
Our list of the pros and cons of Shared Ownership can help you decide whether the scheme is right for you.
Working out whether you’re eligible is the first step in purchasing a Shared Ownership property. Once you’ve done that, check out our complete guide to Shared Ownership to see what you have to do next – and our list of 8 things you might not know about Shared Ownership can make sure you’re completely sure of what to expect. If you’re not eligible, don’t worry – there are lots of other government schemes that you might be able to use.
Updated April 2021