Low cost ownership home schemes
New build shared ownership
There are several ways that you can access low cost home ownership if you can't afford to buy through the open housing market, can’t raise a deposit or can’t get a mortgage.
New build shared ownership
Also known as part buy, part rent, shared ownership allows you to purchase a share of your home (ownership is shared with the housing association, not someone else).
You buy a percentage and pay a below-market-value rent on the rest, which is owned by the housing association. You will be responsible for repairs on the property inside and outside if it is a house, just inside if it’s an apartment.
To qualify for new build shared ownership, you must have an income of £80,000 or less and not be able to afford all of the deposit and mortgage payments for a home on the open market that meets your needs. You must also be one the following:
- a first-time buyer
- a previous homeowner but can’t afford to buy one now
- forming a new household e.g. after relationship breakdown
- an existing shared owner who wants to move
- a homeowner who wants to move but can’t afford a new home that meets your needs
There may also be some local connection criteria but there isn’t usually.
Armed forces personnel will be prioritised as will some previous personnel depending on what their role was.
Buying a percentage means a smaller deposit is needed (5 or 10% of the share purchased) and a smaller mortgage. It’s a sooner first step on the ladder for lots of people.
You would own a share of the property on a leasehold basis, usually 125 years. Shares can start as low as 10%, increasing in 5% increments up to an initial maximum of 75% (80% on rural schemes). The share bought is based on what you can afford taking into consideration the property price, earnings, savings and monthly outgoings.
You need to get a mortgage or use savings in order to purchase the share.
You also need to pay for legal fees and stamp duty as you would with buying a property outright.
In most cases you can staircase (buy more shares) until you own the whole property (but there are some restrictions, particularly in rural areas). The higher the share, the lower the rent - if you eventually buy 100% you pay no rent.
On some properties a service charge may also be payable to cover the costs of things such as communal landscaping, cleaning, lighting, and lift maintenance.
Older people (55 years old and above) can buy up to 75% through the Older People’s Shared Ownership (OPSO) scheme. Once you own 75%, you don’t pay rent on the rest.
Disabled people can apply for Home Ownership for People with a Long-term Disability (HOLD) if other scheme properties don’t meet your needs (e.g. you need ground floor).
From 1 April 2023, you will be able to check if you are eligible and you will get an immediate answer.
Once eligibility has been confirmed, you can search for new build properties using an online search directory. We will also advertise properties on our Keyways website when a housing association asks us to.
You can then register your interest with the relevant housing association who will take over advising on the process from there.
Second-hand shared ownership can be advertised through estate agents, usually on Rightmove.
Right to shared ownership
It is also possible to buy a share of a home you already rent from a council or housing association under Right to Shared Ownership. You should contact your landlord for details.
Last updated 01 April 2023