Step onto the property ladder
Shared Ownership gives you the opportunity to own a home when you might otherwise be priced out of the market. You start by making a smaller deposit, partially owning the house, and paying rent on what you don’t own. Over time, you have the option to purchase more and more property shares until you eventually own it outright, which is known as ‘staircasing’.
There are many benefits to taking the Shared Ownership route to buying a house:
- Lower deposit needed: You only need a 5% deposit for the share of the house you're purchasing (typically between 10 and 75%), making it more accessible than buying the house outright.
- Smaller mortgage required: Since you're only buying part of the property, you'll need a smaller mortgage.
- Only pay rent on what you don't own: You'll pay rent on the part of the house you don’t own, and as you purchase a greater share of the house, this will go down.
- Your share increases in value: As property prices increase over time, you will also benefit from the increase in the value of what you own.
What is Staircasing?
Staircasing is when you gradually buy additional shares of your Shared Ownership property. Increasing your share and reducing the portion owned by the housing association mostly allows you to eventually own 100% of your home.
How staircasing works:
- Increase your share with incremental purchases: You can buy a larger share in your property. This is generally in blocks of 10% or more (although this can vary between housing associations).
- You’ll pay current market value: It is important to note that additional shares are purchased at the current market value, not the original purchase price.
- A valuation is required every time: Every time you staircase, you'll have to pay for a RICS-qualified surveyor to value your property. Learn more about surveys and valuations here.
- Mortgage increases but rent decreases: As you increase your share, your mortgage payments will increase, but your rent payments will also decrease.
- You will eventually have full ownership: Once you own 100% of the property, you'll no longer have to pay rent to the housing association.
Repairs and Home Improvements for Shared Ownership Homes
Repairs and maintenance:
As a shared ownership homeowner, you are responsible for repairs and maintenance regardless of the percentage share you own in the property. Some of the costs may be covered by the building warranty or the housing association, if your home has an 'initial repair period'. Therefore, be sure to check your contract before scheduling any repairs.
The 'initial repair period':
If you bought your shared ownership home in 2021, your lease might include an 'initial repair period'.
During this time (usually 10 years), your landlord takes responsibility for certain repair costs, but only if you own less than 100% of your home. Your landlord will cover essential repairs to the building exterior and structural repairs inside your home. After this period ends, or if you buy the property outright, all repairs become your responsibility.
Your landlord will no longer be obligated to pay for repairs they'd normally cover if you break the terms of your lease (like causing deliberate damage or skipping routine maintenance).
Home improvements:
You have the freedom to make home improvements such as painting, decorating and refurbishing your shared ownership home, including replacing kitchens or bathrooms.
You may need to obtain written permission from your landlord before making any structural changes to the property. Before you begin any work, check with your landlord which alterations require permission.
It's important to remember that any changes to your home may increase or decrease its market value, which could affect the price if you decide to purchase additional shares in the future.
