Homes to buy

How does shared ownership work?

If you’re looking to take your first step onto the property ladder, shared ownership could be the answer. Here's how it works.

Shared ownership

Many of our new developments include homes for shared ownership. Shared ownership makes it easier for first-time buyers to afford their home, as the amount of money required for a deposit is much lower than when you buy a property on the open market.

With shared ownership, you pay a mortgage on the share of the property that you own and pay us rent for the remaining share. In some cases, you can start with as little as 25% – and you only pay a deposit on your share. Over time, you can increase your share of the property, a bit at a time, until you own the property outright – this is known as ‘staircasing’. 

For more information on staircasing and selling your shared ownership property, check out your handbook here. 

Click here to check out the homes we have available for shared ownership now!

What is shared ownership?
If you’re a first-time buyer, shared ownership gives you the opportunity to purchase a share in a property if you can’t buy it outright. Shared ownership is ideal for people who would like to own their own home but can’t afford one on the open market, as you only take on the level of financial commitment you are comfortable with.

You’ll pay a mortgage on the share you own, and pay rent to a housing association on the remaining share. Because you will only need a mortgage for the share you purchase, the deposit required will be a lot lower than a deposit on an outright purchase.

You’ll also have the option to increase your share during your time in the property through a process called ‘staircasing’. In most cases, buyers staircase all the way to 100% and eventually own the property outright. Shared ownership properties are always leasehold.

Shared ownership makes buying your home cheaper in a number of different ways.
  • Your deposit can be 5% of the price of the share, not of the whole property – and you can start with as little as a 25% share in some cases.
  • Your rent is less than the rate charged on the open market – it’s usually charged at 2.75% of the property value per annum.
  • Your stamp duty land tax (SDLT or simply ‘stamp duty’) can generally be deferred until your share reaches 80%.
Can you give me a breakdown of the cost?
If, for example, you are buying a 25% share of a home that has a full market value of £300,000, the value of your share would be £75,000. If you are required to give a deposit of 10%, you would need to pay £7,500.

This example is just a guide and the percentage purchased and deposit shown are both the minimum required.
When you part-buy and part-rent your home, what exactly are you buying?
Shared ownership means you are effectively buying a share in a leasehold house or flat that may be either new or a resale. Unlike purchasing outright, you will also pay rent on the portion that you don’t yet own alongside your mortgage.

You have the option to buy further shares of your home from the housing association you buy with ­– up to and including 100% ownership. The price of buying these further shares will be based on an independent valuation at the time of your purchase.
Does shared ownership mean sharing with another person?

While you’re welcome to buy with another person, shared ownership does not mean you have to share your home with other people. It means sharing the ownership of your home with a housing association to make it more affordable. You will then pay rent to the housing association to cover their share of the property.

Are you eligible for shared ownership?
There are some general eligibility requirements that anyone wishing to buy a shared ownership home must meet.
  • You need to be at least 18 years old.
  • If you are outside of London, your annual household income must be less than £80,000.
  • In London, your annual household income must be less than £90,000.
  • As shared ownership is intended for first-time buyers, you aren’t eligible if you already own a home – unless you are in the process of selling it.
  • You should not be able to afford to buy a home suitable for your housing needs on the open market.
  • You must show you are not in mortgage or rent arrears.
  • You must be able to demonstrate that you have a good credit history (no bad debts or County Court Judgements) and can afford the regular payments and costs involved in buying a home.
Alongside these requirements, you should have savings of or access to at least £4,000, which will cover the costs of buying a home. Please be aware that this is a guideline figure and the actual amount you will need depends on the Help to Buy option you choose.
Can you purchase any property on a shared ownership basis?
No. Shared ownership is only available on specific properties.
Can you decorate your shared ownership home?
You are free to decorate your home as you like. There could be restrictions on making any major alterations to the building though, so make sure you check before doing anything more significant.
What is a shared ownership lease?
The shared ownership lease sets out the rights and obligations of both the landlord (Watford Community Housing) and the tenant (the shared owner).
How can I buy a shared ownership home?

Getting started with shared ownership is quite simple. You should first ensure you are eligible. In addition to the general eligibility rules, some housing associations and boroughs will have their own terms regarding priorities and affordability, which will be outlined on each property listing.

Take a look at our current opportunities. Here you can see what is currently available and find contact details for the agents handling the sale of our properties.

Help to buy

If you want to purchase your own home but can't afford to buy on the open market, we can also help you get a foot on the ladder through the Help to Buy scheme.

The scheme is open to first time buyers and existing home owners and even through shared ownership, with as little as a 5% deposit needed to get you started!

Find out more about the help to buy scheme here!