In the face of soaring property prices, many people are finding it increasingly difficult to step onto the property ladder. However, shared ownership has emerged as a viable alternative solution for prospective homeowners, providing an opportunity for individuals to own a share of a property while paying rent on the remaining portion. This article explores how shared ownership works and its potential benefits for aspiring homeowners.

What is Shared Ownership?

Shared ownership, also known as part buy-part rent or shared ownership scheme, is a home-buying option that enables individuals to purchase a share of a property, typically between 25% and 75%, while the remaining share is owned by a housing developer. The buyer then pays subsidised rent on the portion they don't own.

There are plenty of myths and mistruths about shared ownership, but ultimately it’s an incredibly useful scheme that can help you climb the property ladder. It’s an accessible, straightforward process that’s well worth considering.

How Does Shared Ownership Work?

To help you better understand this useful housing product, let’s go over how shared ownership works:

• Eligibility and Application: In order to qualify for shared ownership, you’ll need to meet certain criteria, such as being either a first-time buyer or having previously owned property but don’t anymore. Prospective buyers must apply to the relevant housing developer and provide the necessary financial information for assessment.

• Financial Assessment: Once the application is submitted, a financial assessment is conducted to determine the buyer's affordability. This assessment takes into account income, savings and any outstanding debts.

• Find Your Property: When you apply for shared ownership, you’ll need to select a specific property for the application. Shared ownership properties are available across various locations and the developer can provide information on available options.

• Purchasing a Share: Once a suitable property is found and the application is approved, the buyer can proceed with purchasing a share. A mortgage is typically required to finance the share being purchased. Buyers (in most cases) have the option to increase their share over time through a process called staircasing, which allows them to buy additional shares and reduce the amount of rent paid.

Benefits of Shared Ownership

There are a few strong benefits that shared ownership offers, so let’s go over them:

• Affordable Entry Point: Shared ownership offers a more accessible entry point into the property market, as buyers only need to fund a portion of the property's value. This means a much lower deposit is usually required than when purchasing outright; often the biggest financial hurdle for first-time buyers getting onto the property market.

• Lower Monthly Costs: Compared to renting privately, shared ownership can often result in lower monthly costs. Buyers pay rent on the portion they don't own, which can be lower than market rent for a similar property.

• Flexibility to Increase Ownership: In most cases, shared ownership offers flexibility for buyers to increase their ownership share gradually through staircasing. As their financial situation improves, buyers can purchase additional shares, reducing the amount of rent paid and increasing their ownership stake. Staircasing is subject to the terms and conditions of the specific development and plot.

Shared Ownership Makes Securing a Home Easier

Shared ownership presents an attractive opportunity for individuals who want to take their first steps onto the property ladder. With its affordable entry point, lower monthly costs, and potential for equity growth, shared ownership offers a promising pathway to homeownership. If you’d like to learn more about shared ownership, get in touch with our sales advisors at Sanctuary by emailing