A guide to Shared Ownership

Everything you need to know about how Shared Ownership works:

• What is Shared Ownership?
• How does Shared Ownership work?
• Am I eligible for Shared Ownership?
• Can I buy more shares in my Shared Ownership home?
• Is Shared Ownership affordable for first-time buyers?
• How does Shared Ownership work with L&Q?
• Shared Ownership FAQs
• Advantages and Disadvantages of Shared Ownership

What is Shared Ownership?

Shared Ownership is a government-backed scheme that helps first-time buyers afford to get on the property ladder. Through part-buy/part-rent, buyers purchase shares in a property that would otherwise be unaffordable to them. With a small deposit, you may be eligible for a shared ownership mortgage, which has a lower monthly mortgage repayment. You can buy a share in a home and rent the rest until you can afford to own it 100%.  

How does Shared Ownership work?

With the government’s Shared Ownership scheme, you buy a share of your new home and pay rent on the rest. As you save money and your financial situation improves you can buy a larger share in your home until you own it outright. You usually purchase anywhere between 25% and 75% of the property value with a small deposit and then pay subsidised rent for the portion of the home you don’t yet own. You take a regular mortgage on the share value that you are looking to purchase, minus the deposit amount. As your financial situation strengthens, you can move towards full ownership through a process called ‘staircasing’. For many new buyers in London, where property prices are notoriously high, this is one of the best and most accessible ways to become a homeowner. L&Q have Shared Ownership houses and apartments available across the country. In London, shared ownership is available in areas including Acton, Barking, Walthamstow and Whitechapel. We also offer shared ownership in Buckinghamshire, Warwickshire, Essex, Berkshire, Lancashire and Manchester.

If you are interested in any of our developments in Manchester or in the North West, apply here.

For all other developments, fill in our application form to get the process started.  

Am I eligible for Shared Ownership?

To buy a home through Shared Ownership you will need to meet the following requirements to be eligible:

• Have a combined annual household income under £80,000, or £90,000 in London
• Not own a property or part of a property
• Over 18 years old

Read a full list of the Shared Ownership eligibility criteria, or complete our Shared Ownership Application form.  

Can I buy more shares in my Shared Ownership home?

Through a process known as ‘staircasing’ you can buy more shares in your home at any time and move towards fully owning it. You can also sell your share of the property at any time, and our dedicated resales team are able to assist at every step of the process.  

Is Shared Ownership affordable for first-time buyers?

Since the scheme started in 1990, Shared Ownership has helped thousands of people get onto the property ladder. You only need a small deposit and enough to cover the reservation fee and mortgage valuation fee to secure your property. The monthly mortgage repayments on the portion you own are much lower than if you owned the property outright. This makes it one of the most affordable options for new buyers. If you are allocated one of our L&Q homes, you will then meet with our appointed mortgage advisor to check that the purchase is affordable to you. They’ll help you consider the deposit, monthly payments, mortgage repayments and any other upfront and ongoing costs so that you can make the best decision for your finances.  

How does Shared Ownership work with L&Q?

When you buy a Shared Ownership home with L&Q you are known as an ‘owner-leaser’ and L&Q acts as the landlord. Once you buy the home outright, the freehold is usually transferred into your name. Similarly, if you purchase an apartment and fully own it, the leasehold title is typically transferred to you. However, on some developments, this may not be possible, details will be provided by the sales representative at the time of sale. Your deposit is between 5% and 10% of the share you are buying. You pay a mortgage on the share you own, and you pay L&Q rent on the share you don’t own.  

Shared Ownership FAQs:

Is it easy to sell my Shared Ownership home?

You can sell your home at any time. Under the terms of your lease, we have eight weeks to find a buyer for your home so your property can remain as a Shared Ownership property. You can then instruct an estate agent on the open market.  

What is staircasing?

‘Staircasing’ is the term used to describe the process of buying more shares in your property, moving you gradually closer to full ownership. You can go through the staircasing process up to three times. It is up to each leaseholder if you want to go through this process. As you buy more shares in the property, you pay less rent.  This is because the rent you pay is based on the amount of shares L&Q have in the home. Each time you staircase we carry out a property valuation. You buy shares at the current market value, rather than the price you bought the first share.  

What is the new model of Shared Ownership?

The new model for Shared Ownership, published in 2021, states:

• The minimum initial share was reduced from 25% to 10%.
• Staircasing can now happen in 1% increments over the first 15 years, with significantly reduced fees.
• In the initial 10-year period, Shared Owners are given support from the landlord to pay for essential repairs.
• Shared Owners have more control if they decide to sell the home.
• The term of the leasehold moved from 99 years to 990 years.

These changes are applicable to properties in England only.  

What are the advantages of Shared Ownership?

The biggest advantage of Shared Ownership schemes is that the deposit is much smaller than buying a house outright, which makes it much more affordable for many first-time buyers.  

What are the disadvantages of Shared Ownership?

Although Shared Ownership is a stepping-stone towards owning your own property, you are still a tenant and therefore need to ensure rent payments happen on time or risk eviction or repossession. Most Shared Owners are also not allowed to sub-let their properties unless they seek permission from their landlords or own 100% of the property. In addition, you may not qualify for first-time buyer stamp duty exemption. Learn more about the advantages and disadvantages of Shared Ownership

Can you make a joint application for Shared Ownership?

Yes. Two of you can apply together. For instance, friends looking to buy together or a couple starting a new home can make a joint application.  

Do any buyers get priority over others?

In some instances, certain applicants will get priority. These include employees of the MOD, those who already live or work in the borough where the development is located, or those who live or work in a neighbouring borough. Some local councils also prioritise households with children. Where no priority criteria applies, homes within London will be allocated based on priority, whereas homes outside of London will be allocated on a first come, first served basis (Subject to any assessment or documentation required being complete.)  

Can L&Q help with a Shared Ownership mortgage?

Yes. When you are successfully allocated a home, L&Q will appoint an independent mortgage advisor who will help you with a mortgage application and ensure that the home is within your financial means.