Shared ownership schemes provide an accessible path to property ownership in London’s challenging real estate market.
These government-backed initiatives allow buyers to purchase a share of a property (usually between 25% and 75%) while paying rent on the remaining portion.
Understanding how shared ownership works in London can help determine if it’s the right choice for your housing needs and financial situation.
How Shared Ownership Works in London
You buy a percentage of a property from a housing association or registered provider and pay rent on the portion you don’t own.
- Initial shares typically range from 25% to 75%
- Rent is charged on the remaining share at below market rates
- You can buy additional shares over time (known as staircasing)
- Most properties are new builds or resale housing association homes
Eligibility Requirements
To qualify for shared ownership in London, you must meet specific criteria:
- Annual household income below £90,000 in London
- First-time buyer or previous homeowner who can’t afford to buy now
- Good credit history and ability to afford monthly payments
- 18 years or older
Costs Involved
Several costs need consideration when pursuing shared ownership:
- Deposit (minimum 5-10% of your share)
- Monthly mortgage payments on your share
- Rent on the remaining portion
- Service charges and maintenance fees
- Buildings insurance
Finding Shared Ownership Properties
Several resources help locate shared ownership properties in London:
- Share to Buy – Leading property portal
- Homes for Londoners – Official GLA platform
- Local housing associations
- Property websites with shared ownership filters
Application Process
The application process follows these steps:
- Register with a shared ownership provider
- Complete financial assessment
- View properties
- Reserve your chosen property
- Arrange mortgage and solicitor
- Exchange contracts and complete purchase
Advantages and Considerations
Benefits:
- Lower deposit requirements
- Smaller mortgage needed
- Opportunity to increase ownership gradually
- Access to new-build properties
Considerations:
- Combined monthly costs can be high
- Responsibility for all maintenance costs
- Restrictions on subletting
- Potential difficulties when selling
Next Steps for Prospective Buyers
Take these actions to start your shared ownership journey:
- Check eligibility on the Share to Buy website
- Calculate affordable monthly payments
- Research housing associations in preferred areas
- Speak with a mortgage advisor experienced in shared ownership
- Register with relevant housing providers
Contact the Share to Buy helpline at 020 7089 1315 for assistance with your shared ownership journey in London.
Making the Most of Your Shared Ownership Property
Understanding how to maximize your shared ownership investment can help you build equity and manage costs effectively:
- Keep track of property value changes to plan staircasing opportunities
- Budget for all monthly costs including service charges
- Consider overpayments on your mortgage when possible
- Stay informed about lease terms and obligations
Common Mistakes to Avoid
- Not factoring in all monthly costs before committing
- Overlooking lease restrictions and terms
- Waiting too long to consider staircasing options
- Failing to maintain the property adequately
Future of Shared Ownership in London
Recent developments and upcoming changes in the shared ownership sector:
- Introduction of new minimum share percentages
- Reduced staircasing increments
- Extended repair periods covered by housing associations
- More developments planned across London boroughs
Taking Your First Step into Property Ownership
Shared ownership represents a viable route to homeownership for many Londoners. Success depends on thorough research, careful financial planning, and understanding both the benefits and responsibilities involved.
- Research thoroughly and seek professional advice
- Consider long-term affordability and career plans
- Compare different housing associations and locations
- Prepare all necessary documentation early
FAQs
- What is Shared Ownership in London?
Shared ownership allows you to buy a share of a property (between 25% and 75%) and pay rent on the remaining portion to a housing association. You can gradually increase your share through a process called ‘staircasing’. - Who is eligible for Shared Ownership in London?
You’re eligible if your household earns £80,000 or less annually, you’re a first-time buyer, or you used to own a home but can’t afford to buy one now. You must also have a good credit history and enough savings for deposit and legal fees. - How much deposit do I need for Shared Ownership in London?
You typically need a minimum 5-10% deposit of the share you’re buying, not the full property value. For example, for a 25% share of a £400,000 property (£100,000), you’d need a £5,000-£10,000 deposit. - What are the monthly costs involved in Shared Ownership?
Monthly costs include mortgage payments on your share, rent on the remaining portion, service charges, buildings insurance, and maintenance fees. You’re also responsible for all utility bills and council tax. - Can I sell my Shared Ownership property in London?
Yes, you can sell your share at any time. The housing association usually has first refusal rights for 8 weeks to find a buyer. After this period, you can sell your share on the open market to eligible buyers. - How does staircasing work in London Shared Ownership?
Staircasing allows you to buy additional shares in your property, usually in increments of 10%. The cost of additional shares is based on the property’s current market value, which requires a new valuation each time. - What areas in London offer Shared Ownership schemes?
Shared Ownership properties are available across all London boroughs, from Zone 1 to Zone 6, through various housing associations. Popular areas include Hackney, Greenwich, Lewisham, and Newham. - What happens if I need to relocate from London?
You can either sell your share or, in some cases, sublet the property with permission from the housing association. Subletting rules are strict and usually only permitted in exceptional circumstances. - Do I pay Stamp Duty on Shared Ownership properties?
You can choose to pay Stamp Duty either on the full property value upfront or in stages as you purchase shares. First-time buyers may qualify for Stamp Duty relief on properties up to £500,000. - What are the maintenance responsibilities in Shared Ownership?
Despite only owning a share, you’re responsible for 100% of the maintenance costs inside your property. The housing association maintains communal areas, covered by your service charge.
