Frequently Asked Questions

You can apply for shared ownership if you have a total household income of less than £80,000 per year (£90,000 in London).

Potential applicant(s) must be over 18 years of age.

You need to demonstrate that you can’t afford to buy a home on the open market, have a good credit rating and having enough savings to cover the legal costs of buying a home and the deposit.

If you are a current homeowner, your existing property will need to be sold subject to contract before you can apply.

All joint applicants must be named on any mortgage offer and on the resulting shared ownership lease.

Some housing developments have a planning condition attached to them which means priority must be given to people who meet certain criteria or have a local connection to where the homes are located.

This will depend on the housing association, but most will require you to complete a formal application process.

Each housing association must publish what is known as a ‘First Come, First Served Policy’ which will explain how they prioritise people when there is more than one potential purchaser for each home.

A potential buyer must demonstrate that they can afford to maintain the costs of buying a shared ownership home, but cannot afford to buy a home, that meets their needs, on the open market.

All potential buyers will be required to undertake a financial assessment by a qualified mortgage broker. This broker will be nominated by the housing association, but you do not have to use them to arrange your mortgage if your application is successful.

You should not be charged for this financial assessment.

The assessment is used to determine the surplus income that a potential applicant would have left after considering their income and outgoings, assuming they have purchased a specific share in a specific property, where the property value, rent, service charge and likely mortgage costs are known.

Each housing association must publish a Surplus Income policy which states how much surplus income they require you to have and this will determine the size of share that you are expected to buy.

Several factors will determine the amount of deposit you will need including:

• Your income
• Your credit history
• Your choice of lender
• Your residency status
• The size of share you are assessed for
• The value of the home you are interested in

It is usual for both housing associations and lenders to require at least a 5% deposit. This is 5% of the value of the share size you have been assessed for.

As your own credit history will be unique to you and your circumstances it is difficult to give you detailed advice on this question.

Each housing association and mortgage lender will have a different view on the risk of selling or lending to a household with a poor credit history.

Some housing associations publish their adverse credit policies and the mortgage broker that undertakes your financial assessment will be able to advice on the different policies used by mortgage lenders.

A poor credit history may limit the number of mortgage lenders available to you and the level of deposit you need.

Yes, but you would need to meet several conditions, including:

• You meet the general eligibility criteria for shared ownership
• You have evidence of the funds available
• You do not have sufficient funds to buy a suitable home without the assistance of the shared ownership product
• You can demonstrate that you are unable to obtain a mortgage, or it is not suitable for you to do so
• You can demonstrate that you are unable to obtain a mortgage because of their religious beliefs

Cash buyers are required to complete the same financial assessment as a mortgage buyer and to meet the surplus income test.

As well as your deposit you will also needs to fund some or all of the following:

• A Reservation Fee which is typically deducted from your final completion costs or credited to your rent account
• Solicitor and conveyancing fees and associated costs
• Mortgage arrangement fee, if applicable
• Mortgage valuation fee, if applicable
• Mortgage broker fee, if applicable
• Rent and service charge payable in advance
• Stamp Duty Land Tax which you can choose to pay either as a one-off lump sum based on the full market value of the property, or in stages if you increase your share (staircasing) – it is recommended that you get advice from your solicitor on your options

You are likely to have to pay:

• Mortgage repayments, which will depend upon the amount you have borrowed, the interest rate and the term of the loan you have taken
• The rent, which will depend upon the share you have bought and the rent setting policy of the housing association
• Service charges, estate fees, management fees, building insurance – housing association’s often have different practices on how they refer to such fees. For example, some may lump them all together and simply call it a service charge.

It is important is that you clearly understand what the different costs are and how they are reviewed in the future. This will be detailed in the housing association’s Key Information about the Shared Ownership Home which should be provided to you before you reserve a home.

Your shared ownership lease should set out services that you may need to pay for in the future. In the main these are:

• Staircasing Costs: If you choose to buy more shares in the future you may be liable to pay for the cost of the valuation, legal fees and administration fees charged by the housing association

• Selling Costs: When you sell, you may need to pay for the cost of the valuation, solicitor fees, estate agent fees, or a nomination/assignment fee payable to the housing association

• Consent Costs: You may be required to pay an administration fee to the housing association if you seek consent from the Landlord on matters where you are required to do so by the lease

See also the section on who is responsible for repairs

The share you buy will be granted to you on a leasehold basis.

The length of lease now available on new homes has increased since the early 2020s and is now often as high as 999 years.

Building Insurance

Your housing association or the freeholder of your home is legally responsible for arranging the buildings insurance.

• What it covers: The structural elements of the property, including the roof, external walls, floors, communal areas (if any), and usually fitted kitchens or bathrooms.

• How you pay for it: You do not buy an individual policy. Instead, the housing association normally purchases a commercial group policy covering all of their properties, and your portion of the premium is billed to you through your monthly or annual service charges.

• The exception: If you live in a shared ownership house (not a flat) and you eventually “staircase” your way to 100% full ownership, the legal obligation shifts to you, and you must arrange your own buildings cover.

Contents Insurance

You are responsible for arranging your own contents insurance.

Contents insurance usually covers your furniture, clothes, electronics, appliances, and personal items. You can buy contents insurance from a variety of providers either directly or through price comparison websites.

This very much depends on the wording in your shared ownership lease and if you live in a house or flat.

The following is therefore only a general guide and you should check the detail of your specific lease.

House – You will generally be responsible for meeting all the costs of any repairs and maintenance regardless of what share size you own.

Flat – You will generally be responsible for meeting the costs of any repairs and maintenance of the internal elements of your flat. For example, the decoration, flooring, internal doors, plasterwork, servicing your boiler, fixing plumbing leaks, and handling electrical repairs.

The outside of your flat and any communal areas are usually the responsibility of the housing association who will normally seek to recover the costs of such works through any service charge.

Initial Repair Period – Since 2021 some shared ownership leases include a clause that requires the housing association to refund up to £500 per year (for the first ten-years) to help cover essential internal repairs (like plumbing and heating fixtures). You should check that this cover applies to your lease and the housing association’s specific policy before committing to any expenditure.

Your new home will often come with a defect liability period. This is usually 12-months from the date your home was legally transferred from the builder to the housing association (not 12-months from the day you complete your purchase).

The housing association should provide you with information on what constitutes a defect, how to report defects and how long they would expect different types of defects to be resolved.

Certain items in your home may come with warranties. For example, any built-in appliances or the heating and hot water system. The housing association should advise you if you are responsible for registering these warranties yourself.

Your new home will often be sold with some kind of structural warranty or insurance cover, which often lasts for up to ten-years. This cover protects you against structural defects due to poor workmanship or faulty materials. Be aware that such warranties often have an excess that you have to pay if you make a claim (like you find with other kinds of insurance product).

Yes. This is called ‘staircasing’.

You can normally buy all the remaining shares until you own your home outright, but sometimes the level of shares you can buy is capped.

The number of shares you can buy in each transaction will be set out in your lease. Some leases now allow you to buy shares from as little as 1%.

The price you pay will depend on how much your home is worth at the time you buy more shares. The property will need to valued by a RICS qualified valuer the cost of which is usually covered by you.

The rent you pay will reduce proportionately to the number of extra shares you buy.

This will depend on what is written in your lease. You will normally have to give the housing association some time to find a buyer for your share. If they ‘nominate’ a buyer to you then you must sell you share at a value set by an independent valuer. You may also be required to pay the housing association a fee for finding you a buyer.

If the housing association do not nominate a buyer, you would normally list your home with a local estate agent. Any buyer you find will still need to be approved by the housing association.

You also have the option to buy the remaining shares and sell the property outright at the same time.