What to Expect From a Shared Ownership Scheme

When it comes to purchasing your first home, making informed decisions based on facts and figures is a sure-fire way to ensure that you are confident in taking your first steps onto the all-important property ladder.

We’re pretty sure you’re with us when we say that saving for a huge deposit, in order to get into the property market, is extremely difficult in the current financial climate, and anything that can be used to support first-time buyers is almost definitely a welcome resource. That’s where shared ownership schemes come into place, built specifically to help first-time buyers in their venture to own a home. We’re working with housing association Aster, to discuss exactly what a shared ownership scheme is and how the scheme could be used to a home owners’ advantage.

The way in which the shared ownership scheme works is simple, the scheme is set up by a housing association, to offer prospective buyers the chance to buy a share of a particular property. The housing association at this point owns the rest of the property, but house owners are given the opportunity to increase their ownership all the way up to the full 100 percent. The home owners therefore pay their mortgage on the 25% they own and pay rent to the housing association on the associating 75% that they own. In theory, this means that you could purchase a house with as little as 5% of 25% value of the entire property (depending on the mortgage provider), meaning the years of saving could be over much sooner than you think.


By purchasing between 25 – 75 percent of the property, as opposed to the entire property, the overall deposit can be lower. If you have significant savings, percentage purchased by the buyer can be bought outright, however you can also purchase these shares through a mortgage. The percentage owned by the housing association is then repaid through annual rent. The larger the share purchased by the buyer, the lower the rent.


To be considered eligible for the scheme, your yearly household income must be below 80,000 outside of London, and 90,000 within London itself. You must be a first-time buyer, or a buyer who previously owned a home but is now unable to purchase again.


In theory, you would only require a 5% deposit of the percentage you are purchasing as opposed to 5% of the entire property, therefore saving for a deposit such be much easier. You can also decorate the property however you want, with the usual rented restrictions being lifted. Most importantly, you’re given the chance to eventually buy out every share of your property, until you are the sole owners.

So, let’s look at an example to put all of this knowledge and understanding into practise…

Somerset is a bustling and popular area within the south-west of the UK, and one in which the demand for housing is extremely high. In 2018 the average semi-detached property within Somerset sold for £269,519, meaning a first-time buyer would be looking at an absolute minimum deposit of around £27,000 in order to secure such a property. With a shared-ownership scheme, there are brand new semi-detached properties available with a full asking price of £175,000, which with for example a 40% share at £70,000 would mean requiring a deposit of only £3,500. With so many options for shared ownership homes in Somerset, after looking at the numbers, it’s something well worth considering and investing a little more time into researching.

If you’re a prospective buyer, looking to get onto the property ladder, shared ownership schemes could be well worth looking into, and may well be the resource that leads to your home-owning journey.

Krysta Jakson

Krysta is an experienced blogger, writing blogs on lifestyle, fashion, beauty and travel. She wonderfully describes the latest trends on these topics, making the articles interesting for all the readers.

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