Here’s how a shared ownership scheme works when buying a property - and who can apply

Owning a home is something we all dream of from a young age, but with ever increasing costs, it often seems very far away.

For those who can’t afford to buy a house, shared ownership schemes can be the solution. Here’s how they work.

What is shared ownership?

Under a shared ownership scheme, you have the ability to buy and own a percentage of the property’s value and pay rent on the remaining share.

This is helpful for those who do not have enough money to purchase a house outright and those who cannot get a mortgage to cover the cost of a property in full.

As the name suggests, you don't own the property outright. Rather, you share the ownership of the property with a housing association who owns the rest of the share.

Typically under shared ownership schemes, you can purchase between a quarter to three-quarters of a property and are able to buy a bigger share in the property at a later date.

What kind of property can I buy with a shared ownership?

The majority of properties available to buy with shared ownership are new builds, however some homes eligible are those put back on the market by housing associations.

In England, all shared ownership properties are currently only offered on a leasehold basis.

What is a leasehold?

A leasehold is a type of land or property tenure in which you buy the right tooccupy the land or live in a building only for a specific length of time.

However some leaseholds can be for 999 years which effectively gives the purchaser a title that is as good as a freeholder.

Who is eligible for shared ownership?

The criteria for who can apply for the shared ownership scheme differs depending on your country.

England

In England you can buy a home with help from the shared ownership scheme if your household earns £80,000 a year or less, with that threshold increasing to £90,000 a year or less in London.

Additionally according the government website, you will also need to match any of the following criteria apply:

• you’re a first-time buyer
• you used to own a home, but cannot afford to buy one now
• you’re an existing shared owner
• you rent a council or housing association property

Scotland

While first time buyers with limited housing alternatives are also given priority for shared ownership in Scotland, other cases are also given top priority, such as:

• members of the armed forces
• veterans who have left the armed forces within the past two years
• widows, widowers and other partners of service personnel for up to two
• years after their partner was killed while serving
• public sector tenants
• families on low incomes
• disabled people

A statement on the Scottish government website states that “if you can afford to buy a house outright, you won't qualify for shared ownership housing.”

Similar to Scotland, in England, people who work in the military will be given priority over other applicants.