What is shared ownership? Shared ownership is something that has been provided through housing associations for a while and is a way of part-ow...

What is shared ownership?

Shared ownership is something that has been provided through housing associations for a while and is a way of part-owning and part-renting a property.

Aimed at people who cannot afford to buy their home outright, shared ownership allows you to buy a stake of 25-75 per cent in the property with a mortgage. You then pay rent on the remaining share that remains owned by your local housing association.

The amount of rent you pay can vary but is capped at 3 per cent and is calculated on the share of the property retained by the housing association.

For example, if there was a property valued at £150,000 and it was bought on a 50% share, the initial rent would be £75,000 x 3 per cent = £2,250 per annum, paid monthly at £187.50.

You would then pay the mortgage payment for the £75,000 you have purchased on top of the rent.

You can keep on buying… Known as ‘staircasing', you can purchase additional shares in the future as and when you can afford to, and you can continue to do this until you own the property outright.

Every time you ‘staircase', the amount of rent you have to pay will be recalculated and will reduce proportionately. However, you are not forced to buy further shares and the original share split can remain in place.

Where is the GLA's funding going? Shared ownership is to receive up to £180m through the First Steps Challenge Fund. First Steps is the official intermediate housing programme from the Mayor of London, created to help low and modest-income Londoners to buy or rent at a more affordable price, and is looking to boost the delivery of 4,000 new homes between 2015 and 2020.

The funding is part of the £1.45bn secured from the government for affordable housing delivery in 2015-18.

Are shared ownership schemes only available in London, then?

No. The schemes are available nationwide, though it should be noted that not all lenders offer mortgages for shared ownership.

The shared ownership schemes are important in helping people who are looking to get a foothold on the property ladder but are struggling to do so, and, as with any housing scheme, it is important to discuss the details with a professional mortgage adviser who will be able to find the most suitable deals for your situation.