Is Shared Ownership a Good Idea for First-Time Buyers?

Article by: Plumlife

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Getting a foot on the property ladder can feel increasingly out of reach for many first-time buyers. With house prices continuing to rise in recent years, high deposits, and tough mortgage criteria, shared ownership provides a potential alternative. But is it a sensible idea for a first-time buyer?

Shared ownership offers a middle ground between renting and buying, and can be a great option for first-time buyers who can’t afford to buy a home outright. It allows you to purchase a share of a property and pay rent on the rest, making it more affordable to get on the property ladder. This part-buy, part-rent scheme is designed to help people take their first step towards full property ownership.

Read on to find out more about shared property ownership and whether it may be ideal for you.

Who Is Eligible for Shared Ownership?

Shared ownership is designed to help people who can’t afford to buy a home on the open market. To be eligible, you must meet certain criteria:

• You must be at least 18 years old.
• Your household income must be £80,000 a year or less (£90,000 in London).
• You must be a first-time buyer or a previous homeowner who can no longer afford to buy now.
• You should not own another property at the time you buy through shared ownership.
• You must be able to prove you can afford the regular payments and costs involved. Read our detailed guide on what you need for a shared property ownership deposit here.

What Is the Minimum Income for Shared Ownership?

There’s no universal minimum income for shared ownership, but housing associations and lenders will carry out an affordability assessment to determine whether you can manage the monthly costs. These include:

• Your mortgage repayments on the share you’re buying.
• Rent on the remaining share (typically set at around 2.75% of the unsold value per year).
• Service charges and ground rent, particularly in flats or leasehold properties.

Can Someone Live with Me in Shared Ownership?

Yes, you can usually live with a partner, friend, or family member in a shared ownership home, even if only one of you is named on the mortgage or lease. However:

• Only the named owner(s) will have legal rights over the property.
• If both people are contributing financially, you may want to take legal advice and consider a deed of trust.
• The property must be used as your primary residence. Subletting is typically not allowed unless you’ve staircased to 100% ownership and the terms of the lease permit it.

It’s important to check the housing association’s specific rules, as some have their own policies on who can live in the home.

How Does Shared Ownership Work?

With shared ownership, you buy a percentage of a property — usually between 10% and 75% — and pay subsidised rent on the rest to a housing association. You’ll need a mortgage for the share you’re buying, plus a deposit (typically 5–10% of your share’s value).

In most cases, you can increase your ownership over time, a process known as “staircasing,” eventually owning 100% of the property if desired.

Find out more about how shared ownership works in our detailed guide.

What Are the Pros and Cons of Shared Ownership?

Pros:

• Lower deposit requirements.
• Affordable way for first-time buyers to get on the property ladder.
• Monthly costs may be lower than private rent.
• Option for staircasing and to eventually own the full property in most cases.

Find out more about the benefits of shared ownership here.

Cons:

• Youl pay rent on the part you don’t own.
• Staircasing can be expensive, involving valuations, solicitor fees, and potential stamp duty.
• Selling can be slightly more complicated, as the housing association usually has the right to find a buyer first.
• You may be liable for 100% of maintenance costs, even if you own only part of the property. For newer Shared Ownership homes, there may be a 10-year ‘initial repair period’, which entitles you to claim costs of up to £500 a year from the landlord to help with essential repairs. During this time, the landlord is also responsible for paying any repairs to the external fabric of the home and internal structural repairs. 
• Leasehold restrictions may apply (e.g. no pets, no short-term lets).

Read our guide to what you need for a shared ownership deposit here.

Is Shared Ownership Cheaper Than Renting?

Shared ownership is often more affordable than renting privately — especially in high-demand areas. The rent you pay on the unsold share is usually subsidised and below the market rate. That said, you’ll also need to factor in:

• Mortgage repayments.
• Rent.
• Service charges.
• Maintenance costs.

While the monthly payments can be cheaper overall, the total cost of ownership may still add up. Find out whether shared ownership is suitable for you here.

Can I Sell a Shared Ownership Property?

Yes, you can sell your share at any time, but the process differs slightly from selling a property you own outright:

• If you own less than 100%, the housing association has the right to find a buyer first (usually within 8–12 weeks). If they’re unable to, you can then market it independently.
• Your share is valued at market rate, so if the property has increased in value, you may make a profit on your share.
• You’ll need to cover costs such as valuation fees, solicitor’s fees, and possibly estate agent fees if selling privately.

Are you a first-time buyer? Read our tips for getting onto the property ladder.

Final Thoughts: Is Shared Ownership Right for a First-Time Buyer?

Shared ownership can be a helpful route onto the property ladder for first-time buyers who might otherwise struggle to afford a home. It offers flexibility, lower upfront costs, and a long-term path to full ownership. However, it’s important to understand the responsibilities, limitations, and long-term financial implications before committing.

If you’re considering shared ownership, speak to a mortgage adviser, review the lease carefully, and make sure it fits your lifestyle and financial goals. Reach out to us today to find out whether it is the best option for you.

Contact Plumlife Homes for Shared Ownership Properties

At Plumlife Homes, we are dedicated to providing quality properties at affordable prices, with Shared Ownership and Rent-to-Buy schemes for first-time buyers.

To find out more about how the Shared Ownership process works, contact a member of our team. View our range of available shared ownership properties here, and check your eligibility and affordability using the links below.

Affordability Checker

Eligibility Checker

FAQs

Can I Decorate a Shared Ownership Home?

While you can usually decorate and carry out minor alterations, structural changes may require permission from the housing association. Always check the lease terms before making changes. If you are unsure, feel free to contact our team with any questions!

Can I Buy More Shares Over Time in a Shared Ownership Property?

You can buy additional shares in the property (usually in 10% increments) and reduce the rent you pay. Eventually, you can own the property outright, although some homes cap ownership at a maximum share (e.g. 80%).

Do I Need a Solicitor for Shared Ownership?

The process for shared ownership is similar to buying a home outright. This means you’ll need a solicitor to manage the conveyancing, check the lease terms, and ensure everything is in order.

Is Shared Ownership Only for New Builds?

While shared ownership homes are new builds, there are also “resale” shared ownership properties available when existing owners decide to sell their share.

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Can you own 100% of a shared ownership property?

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Article by: Plumlife

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