Want a better deal on your mortgage?

Receive exclusive mortgage rates straight to your inbox

Call us: 0345 305 2540
Need help? 0345 305 2540
Remortgage Calculator Calculator

Shared Ownership Mortgage – Is It Right For You?

MORTGAGES | 14.06.2022

A shared ownership mortgage is a government-supported scheme, designed to help you get onto the property ladder. Shared ownership gives first-time buyers or those that do not currently own a home the chance to purchase a share in a new build or resale property

What is a shared ownership mortgage? 

A shared ownership mortgage is a government-supported scheme, designed to help you get onto the property ladder. Shared ownership gives first-time buyers or those that do not currently own a home the chance to purchase a share in a new build or resale property.  The scheme allows you to buy a share of between 10%-75% of the home's value, and the rest is owned by either the local housing association or the developer who built the property. Each month you pay a mortgage on the part of the property you own, along with paying rent on the share of the property that you don’t own. 

Why buy a shared ownership home? 

Shared ownership is for those who have the goal of owning their own home, but can’t afford to buy one via a traditional mortgage. Shared ownership costs are typically lower than other housing options because: 
  • The rent rate is lower than the rate charged on the open market 
  • You can start with as little as 10% share in the property
  • The deposit needed is 5-10% of the share price, not the full market value of the property 

Who is eligible?

You can apply for a shared ownership mortgage if you’re a first-time buyer, a homeowner who can no longer afford a ‘normal’ mortgage, or already live in a shared ownership home and want to move, and if your household income is less than £80,000 a year (£90,000 if living in London). You should also not be in the position to afford to buy a home suitable for your needs on the open housing market. Finally, it is advisable to make sure you have a good credit score, to prove that you are able to afford the payments and regular costs associated with buying a shared ownership property.

Can I do what I like with my shared ownership home?

You can make changes to your home like any other homeowner, however, your lease may limit certain things you can do without first getting permission, such as structural change e.g knocking a wall through. To be clear about what you can/can’t do with your shared ownership home it is important to see the terms of the lease before buying. 

Will I ever fully own the property?

In a shared ownership mortgage, you have the option to increase your share through a process known as ‘staircasing’, which can take you all the way up to 100% ownership. Once you own 100% of the property, you no longer need to pay rent on the property, just the mortgage, along with any service charges and ground rent. 

How do I sell a shared ownership property? 

Selling a shared ownership home is the same as selling a home on the open market. The only difference is that you must give the housing association the option of finding a buyer first before you put it on the open market. When selling, you will receive a portion of the share price in relation to your owned share of the home. For example, if your home sells for £300,000 and you have a 25% share - you will receive £75,000. If you are looking to buy a home but are not sure of your options, speak to one of our experts who can help you find the best option for you and your circumstances, and guide you through the process.   
Talk to us

If you're unsure and need some advice just give us a call, our expert team of advisers are available to help you choose the mortgage that is right for you.

0345 305 2540 info@taylormade-finance.co.uk

By clicking on the above link you will be leaving the regulated site of TaylorMade Finance Ltd. TaylorMade Finance Ltd is not responsible for the accuracy of the information contained within the linked site.

TaylorMade Finance Ltd is authorised and regulated by the Financial Conduct Authority.

Complaints:

In the event that you wish to complain, you can contact us by email, telephone or letter.

Our address for this is:
Complaints Officer, TaylorMade Finance Ltd, 4 Church Road, Urmston, Manchester, M41 9BU. Our email address is info@taylormade-finance.co.uk and our telephone number is 0161 776 1089. We will then investigate the issues raised and inform you of our findings. Should you be unhappy with the resolution to your complaint you may contact the Financial Ombudsman Service, who can be contacted at the following address: Financial Ombudsman Service, Exchange Tower, London, E14 9SR.

Email: complaint.info@financial-ombudsman.org.uk
Phone: 0800 0234 567

Your mortgage will be secured against your property.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Our fee for this service is 1.95% of the mortgage balance (minimum £1,295 to a maximum of £2,995 although reduced to maximum £1,995 without debt consolidation). Typically this will be £1,995.