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The Shared Ownership scheme is a government-backed initiative designed primarily to help first-time buyers enter the property market. Shared Ownership homes allow buyers to only pay for a deposit on an initial share of a property as opposed to buying a home outright, which requires a far greater upfront cost. So, what are the Shared Ownership costs to be aware of?
When you are first purchasing a Shared Ownership home, you will need to pay:
Each month thereafter, you will also need to pay:
Keep reading to learn more about what the costs associated with owning a Shared Ownership property entail.
When you are initially looking at buying a property, one of the biggest hurdles to becoming a homeowner is typically the cost. This is one of the key advantages to buying a Shared Ownership home, as the initial costs you pay is far lower than buying a home outright. However, there are a number of fees to be aware of when purchasing a Shared Ownership property.
Most housing associations will require you to pay a reservation fee before you can purchase a Shared Ownership home. This fee will take the property off the market, usually for a period of four weeks, while conveyancing is completed.
You will need to enlist the services of a mortgage broker to ensure you select the best mortgage for your requirements. For a fee, a broker will provide valuable advice to help you find the best deal on a mortgage to pay your deposit. The size of this fee varies between each broker, as some mortgage brokers charge a fixed rate and some charge as a percentage of the purchase price. This should be clarified by your broker before they begin work on your behalf.
When purchasing a home, there is a significant amount of legal work that must be completed before you can submit an application for a mortgage. To complete this work, you will need to hire a licensed conveyancer or solicitor. The amount this will cost will depend on the location and value of the property you are buying.
While significantly lower than buying a home outright, you will still need to pay for a deposit to purchase a Shared Ownership home. This is calculated as a percentage of the share you are buying. For example, if you are purchasing a 50% share in a home valued at £200,000, you will only need to pay for a deposit of £100,000. Typically from 5-10%, in this example, you would pay an initial deposit of £5,000 – £10,000.
Learn more about what you need for a Shared Ownership deposit by reading our detailed blog here.
When you are buying your first home, you will have two options for paying Shared Ownership stamp duty:
As of the 1st of April 2025, first-time buyers pay no stamp duty on the first £300,000 for any home that costs up to £500,000.
To ensure you have a smooth start in your new home, don’t forget to account for the cost of hiring a removals team to help you move any furniture and belongings you may have.
Learn some of our top tips for moving house by reading our detailed blog here.
Once you are settled into your new Shared Ownership home, there are a number of regular fees which you can expect to pay. On top of your usual bills such as utilities, WiFi and council tax, below are some common Shared Ownership costs to budget for.
The amount that you pay for your mortgage each month will depend on the size of the initial deposit you paid. The bigger the mortgage you take out, the more you will pay back each month.
While you will own a share in your property, until you reach 100% ownership, you will need to pay rent on the remaining share that you don’t own. This will typically be calculated as 2-3% of the value of the remaining share.
For example, if you own 50% of a property valued at £200,000, you will pay around £2,000-£3,000 in rent each year. Each month, you would pay around £166 – £250 each month.
Learn more about rent payments for Shared Ownership properties by reading our detailed blog here.
If the property you are purchasing has communal areas, you will likely need to pay a monthly service charge to ensure these shared areas and facilities are maintained. This charge can include such tasks as:
An essential fee for all homeowners is contents insurance. Housing associations will typically arrange the insurance for the building and cover the remaining share of the property. However, contents insurance will protect all of your possessions, so it is vital to set this up as soon as you move in.
After living in your shared ownership home for some time, you might decide to move or increase your ownership. Before making this decision, it’s important to consider the potential costs involved in changing your living situation.
After saving some money, you may wish to purchase additional shares in your property, which is a process known as ‘Staircasing’. Through staircasing, you can usually purchase additional shares in your home all the way to 100% ownership. At this point, you would stop paying rent as you would own the property outright.
Learn more about staircasing by reading our detailed blog here.
Depending on the terms of your initial agreement, you may need to extend your lease. However, it’s worth noting that most new Shared Ownership homes now come with a 990-year lease, so the likelihood of needing to extend is low. If an extension is required, it would only be done informally, as you would not qualify for a new lease under the Leasehold Reform, Housing & Urban Development Act 1993.
Learn more about how and when to extend your lease by reading our detailed blog here.
You may decide to sell your property – or your shares – if you are looking to progress up the property ladder or explore a new location. In this case, you will need to hire a surveyor to value your home. You will also need to pay solicitor fees when selling your home.
Learn more about selling a Shared Ownership property by reading our detailed blog here.
Purchasing a Shared Ownership home is taking the first step to owning a home outright. To learn more about how to get started, be sure to contact our team today. Alternatively, browse our range of stunning Shared Ownership properties using the link below.
To check what size mortgage and deposit you can afford to pay for a Shared Ownership home, use our quick and simple affordability calculator below.
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