Shared Ownership Explained

Shared ownership lets you buy a share of a property (usually 25%–75%) and pay rent on the rest. It's designed to help people who can't afford to buy outright get onto the property ladder.

1. You buy a share of a property (typically 25%–75%)
2. You take out a mortgage for your share
3. You pay subsidised rent on the remaining share (owned by a housing association)
4. Over time, you can buy larger shares — this is called 'staircasing'
5. Eventually, you can own 100% of the property

To qualify for shared ownership in England:

• Your household income must be £80,000 or less (£90,000 in London)
• You must be a first-time buyer, or you previously owned a home but can't afford one now, or you're an existing shared owner looking to move
• You must not be able to afford to buy a suitable home on the open market
• You must be able to demonstrate you can afford the mortgage, rent, and service charges

Upfront costs:

• Deposit — Usually 5%–10% of your share (not the full property value). On a £200,000 property buying 25%, your share is £50,000 and a 5% deposit would be just £2,500.
• Solicitor fees — £1,000–£1,500
• Valuation/survey — £300–£500
• Stamp duty — Usually zero for shared ownership properties under £250,000 (you can choose to pay on your share only)

Monthly costs:

• Mortgage repayment on your share
• Rent on the housing association's share (usually 2.75% of their share per year)
• Service charge (if a flat or new-build estate)
• Buildings insurance (sometimes included in service charge)

Example: 25% of a £200,000 Property

• Your share: £50,000
• Deposit (5%): £2,500
• Mortgage: ~£47,500
• Monthly rent to HA: ~£343 (2.75% of £150,000 ÷ 12)
• Monthly mortgage: ~£260 (25-year term, 4.5%)
• Total monthly: ~£603 vs open market rent of £800–£900

You can buy additional shares in your property over time:

• Usually in increments of 10% or more
• The price is based on the property's current market value (you'll need a new valuation)
• If the property has increased in value, you'll pay more per share
• If it has decreased, you'll pay less
• Once you reach 100%, you own outright and stop paying rent

If you want to sell:

1. The housing association usually has the right to find a buyer first (within 4–8 weeks)
2. If they can't find one, you can sell on the open market
3. If you own 100%, you sell normally like any other property

• Lower deposit — Often just £2,500–£5,000 to get started
• Smaller mortgage — Easier to get approved
• Build equity — Your share grows as you staircase
• Below-market housing costs — Combined mortgage and rent is usually cheaper than renting privately
• Stability — It's your home, with more security than renting

• You don't own it outright — Restrictions on modifications and subletting
• Rent increases — The housing association can increase rent (usually by RPI + 0.5% per year)
• Staircasing costs — If property values rise, buying more shares gets expensive
• Selling can be slower — The nomination period gives the HA first rights
• Service charges — Can be significant, especially on new-builds
• Leasehold — Most shared ownership properties are leasehold with associated costs

Leicester has several housing associations offering shared ownership:

• EMH Group
• Midland Heart
• Platform Housing
• Stonewater

New developments in areas like Beaumont Leys, Hamilton, and Thurmaston regularly offer shared ownership plots.

Shared ownership works well if:

• You have a small deposit but stable income
• You want to stop renting and build equity
• You're priced out of the open market
• You plan to stay for several years

It may not suit you if:

• You want full control over your property
• You plan to move within 1–2 years
• You can afford a small property outright

Want to explore your options? Contact Haus Estates — we can help you compare shared ownership with open market buying to find the right path for your situation.