Buying a shared ownership property

Shared ownership can make it easier to buy a home initially, but ongoing costs (such as rent, mortgage payments and service charges) can increase over time.

These ongoing costs can become high. This might affect whether you can afford to buy more shares over time, and might make it more difficult to sell or remortgage the property in future.

Make sure you understand all the costs involved in buying and owning a shared ownership property, to know if it’s right for you.

Check if you are eligible to buy a shared ownership home on GOV.UK.

You can:

• find an organisation that sells shared ownership homes in England (excluding London) on GOV.UK
• search for shared ownership property in London through the Homes for Londoners property portal

You can also find a shared ownership property directly through:

• housing associations
• local councils
• homebuilders’ websites
• property developments
• property listing websites (such as Rightmove)

When you find a property you want to buy, register your interest by completing the form on the property listing page.

Arrange to view a property through the property listing (online), or by calling the housing provider.

You may need to pay the housing provider a fee to reserve the property you want.

Ask the housing provider:

• how long the reservation lasts
• if the fee is refundable if you do not buy the property

If you do buy the property, the fee will be taken off the final amount you pay when you complete the purchase.

The housing provider will arrange for you to have a financial assessment.

A financial adviser will look at your finances to work out the maximum share of the property you can afford to buy. If they work out that you cannot afford to buy a share, then your application will be refused.

They will also explain that you’ll need to pay a deposit of between 5% and 10% of the share you’re buying. You pay the deposit on the day when you exchange contracts.

You may also need to pay Stamp Duty Land Tax (SDLT) on the share you buy.

Even though you own a share, you will be responsible for maintenance of the whole interior of the property and for 100% of the service charge.

Make sure the financial adviser assesses what you can afford based on all the costs, once the conveyancer provides them.

You can find out more about the costs involved in shared ownership.

What you need to bring

Ask your housing provider what you need to bring to the financial assessment.

Documents you’ll usually be asked for include:

• last 3 months payslips and bank statements (or last 3 years of accounts by a qualified accountant, if you’re self-employed)
• photo ID – such as your passport, driving licence or birth certificate
• proof of deposit funds – for example, a bank statement, online banking screenshot
• a completed gifted deposit form, if a relative is contributing to your deposit
• a completed credit score and questionnaire – they may or may not ask you to do this, you can find a credit score checker online
• your Working Tax Credits award notice – if you receive them
• a mortgage in principle – you may not be asked to provide this, but it may be useful

You need a specialist shared ownership conveyancer to do all the legal work for buying the property.

You can use a conveyancer the housing provider recommends from their panel, or you can choose your own – but the housing provider must approve them.

You may need to complete the mortgage application within a certain timeframe. For example, within 2 days of having your financial assessment.

Not all banks offer shared ownership mortgages.

You can:

• apply directly to a lender (bank or building society that offers mortgages)
• apply through a mortgage broker, who will find a mortgage that’s right for you

Check the cost of rent and service charges

Check the cost of the rent and service charges for the property. If they are too high, some lenders may not offer you a mortgage.

The rent and service charges increase over time. If they become very expensive in the future, it might be hard to find a lender when you come to remortgage in the future.

Your conveyancer (solicitor) will gather the legal paperwork and send a list of questions about the property (enquiries) to the seller.

Ask the conveyancer about anything you do not understand and get all the information you need before you buy. Read our advice on questions to ask the seller before you buy.

If you need to pay Stamp Duty Land Tax on your share of the property, your conveyancer should tell you how much to pay and how you can pay it.

Questions to ask before you buy

Read through our guide to questions to ask the seller before you buy.

There are a number of things you need to find out about in order to make an informed decision about a shared ownership property.

Make sure you know what you’re getting into from the start, because different rules apply to different properties.

Check the memorandum of sale

When the housing provider accepts your offer, they will send you a memorandum of sale. This summarises the details of the sale.

This document includes details such as:

• details of the buyer
• details of the seller
• the percentage share that you’re buying
• the agreed sale price for that share
• the deposit amount

Make sure that any other relevant financial details have been added to the memorandum of sale, such as:

• the cost of the rent and service charge
• any management fees
• any financial contribution the housing provider has agreed to make towards the sale (for example, if the provider has offered to pay the legal fees)

You’ll need to pay a housing deposit for the property when your conveyancers exchange contracts. This is usually between 5% and 10% of the share you’re buying.

On completion day, the mortgage lender will transfer the money to the housing provider and you’ll be able to collect the keys. After completion, you are the legal owner of a share of the property.