What is shared ownership?

Shared ownership schemes let you buy a share in a property rather than buying all of it - so you only take out a mortgage on what you can afford in relation to your savings and salary.

You are then either given a low-interest loan by the government and housing associations to pay for the share you don't own, or you pay rent on it to a housing association, depending on which shared ownership programme you choose.

Who is shared ownership for?

Shared ownership schemes are designed for people who are unable to raise a large enough mortgage to buy a property outright - generally first-time buyers.

The government's scheme, known as HomeBuy, prioritises some buyers over others. People at the top of the list include keyworkers - those in "key" jobs such as nursing, teaching, firefighting and the police force - and people on housing association lists (those who are existing local authority and housing association tenants).

If you are not a keyworker you can still apply, as long as you are a first-time buyer who is unable to afford a property outright, although you will be lower down the priority list. The organisations behind shared ownership schemes say they are seeing increasing interest from the young graduate market and professionals on mid-incomes of £30,000 upwards.

Why are most shared ownership schemes in London?

Most developments are in London and the south-east because this is where demand for affordable homes is at its highest.

In London, applications for shared ownership schemes are managed centrally by Housing Options. You have to fill in a form stipulating which HomeBuy scheme you wish to use (see below) and outlining details of your salary and savings. Once your form is submitted you will be contacted for a full financial assessment.

Shared ownership schemes are in existence outside London, however, and your local housing association will be able to tell you about it. Details on finding the association in your borough are available from the Housing Corporation.

What schemes are available?

In 2006, the government tried to revamp shared ownership under a range of HomeBuy schemes, but some of them turned out to be flops.

There are now three main government schemes, all of which offer shared ownership for first-time buyers and key workers: MyChoice HomeBuy, OwnHome, and NewBuild HomeBuy. There is also a scheme for existing social housing tenants called Social HomeBuy.

MyChoice HomeBuy and OwnHome are the latest versions of shared ownership and were launched in this year's budget. They are sometimes referred to by their old name, OpenMarket HomeBuy.

How do those schemes work?

MyChoice HomeBuy

For: Keyworkers earning less than £60,000 and first-time buyers, prioritising those on housing association lists, followed by non-keyworkers earning less than £58,600.

How it works: Applicants can take out a mortgage on 50% of the value of the property they wish to buy. This can be from any high street lender.

Instead of having to find a deposit for the remaining share, buyers can raise up to the remaining 50% of the purchase price with a low-interest equity loan funded jointly by the government and a consortium of the eight housing associations involved with the scheme. In the first year the interest on this loan is charged at 1.75%; in future years it rises to RPI plus 1%.

Homeowners can increase their share in the property by 10% at a time by gradually buying more chunks, or staircasing up, as they can afford to do so. Remember, you will need to meet the usual costs of buying a home, including legal fees and mortgage application fees.

How to apply: Register on the Housing Options website, the central portal for shared ownership applications for people in the south-east. The online form will ask you to fill in your personal details and ask about your earnings and savings.


For: Keyworkers earning less than £60,000 and first-time buyers, prioritising those on housing association lists first, followed by non-keyworkers earning less than £58,600.

How it works: This scheme is run by housing and regeneration group Places for People alongside the Co-operative Bank. It allows eligible buyers to take out a traditional mortgage for a minimum of 60% of a property's value from the Co-op, while Places for People provides an equity loan of between 20% and 40% up to a maximum of £165,000.

On this scheme there is no interest to pay on the equity loan for the first five years. Between years six and 10 the rate is 1.75% a year, and after that it rises to 3.75%. After the mortgage deal has come to an end the borrower can remortgage away from Co-op.

How to apply: Call the OwnHome helpline on 0845 607 0110 or visit OwnHome.

NewBuild HomeBuy and Social HomeBuy

For: Keyworkers and first-time buyers, prioritising those on housing association lists.

How it works: Applicants take out a mortgage on a share of the property - they must be able to purchase between 25% and 75% of the total value of the property through the mortgage and any deposit they can afford to put down. The remaining share is rented from a housing association. Buyers have the opportunity to staircase up over time.

Unlike MyChoice HomeBuy and OwnHome, which let you pick any property (new or old) that is on the market, NewBuild HomeBuy will only let you buy new-build properties from specific developments in your area. Properties are usually, but not always, sold off-plan before the development is complete.

Social HomeBuy works in exactly the same way but is meant for existing social housing tenants.

How to apply: Register on Housing Options.



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