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Overcoming the hurdles standing between you and owning a home of your own is one of the best feelings in the world. The Shared Ownership Scheme allows you to reach that milestone even sooner, removing barriers to entry and offering growth over time. But what is shared ownership anyway, and how does it work?
Shared ownership is a property buying scheme that allows you to:
Keep reading to find out who is eligible for shared ownership, how monthly payments work, and how you can eventually own 100% of your home.
Shared Ownership is a scheme that allows you to buy a share of a property if you cannot afford all of the deposit and mortgage payments. Over time, you can buy more shares, eventually owning 100% of the property.
In the meantime, you’ll pay rent to a landlord for the remaining shares of the property. For example, if you own 75% of the shares of your property, you will only pay rent on 25% remaining shares.
Shared Ownership typically appeals to first-time buyers in their twenties and thirties, though it is also enticing to those looking to re-enter the property market later in life.
There are three key criteria you must meet to be eligible to buy shares in a shared ownership property:
Use our online tools to check if you are eligible for a shared ownership scheme.
Under a shared ownership lease, the types of homes you can buy shares in include:
The organisation you buy your shared ownership home from is known as your ‘provider’ or landlord. These organisations include local councils, housing associations, and developers such as Plumlife Homes.
All shared ownership homes (houses and flats) are leasehold properties, meaning you own the property for a set number of years. On newer shared ownership homes, this lease can be as long as 999 years.
Under a shared ownership lease, you are responsible for your share of the mortgage repayments, rent (on un-owned shares), and the following bills:
Learn more about the monthly payments and bills you’re responsible for in a Shared Ownership agreement in our blog: Shared Ownership Costs: What Bills Are You Responsible For?
Despite owning a portion of your shared ownership home, you will still pay rent to a landlord on the value of the shares you do not own.
Breaking the terms of your lease or not paying rent can result in you losing your home. The landlord reviews the rent regularly and may increase it, up to a limit. Reviews and Limits are detailed further below.
You can only be charged up to 3% of the value of the share the landlord owns when you buy a new-build shared ownership home.
This does not mean your rent won’t go up, though, any increases are in line with the terms set out in your lease. Please read this carefully.
Below are some examples of rent calculated at the rate most landlords set at 2.75%.
| Example Home 1 | Example Home 2 | |
| Total value of the home | £300,000 | £400,000 |
| Your share | £75,000 (25%) | £160,000 (40%) |
| Remaining share | £225,000 (75%) | £240,000 (60%) |
| Rent for the first year (2.75% of remaining share) | £6187.50 | £6,600 |
| Your monthly rent | £515.62 | £550 |
Your landlord reviews your rent regularly at intervals established in your lease, though it’s usually once a year. Your rent will not go down following a review, only up, and the amount it can go up by depends on when you signed your lease.
If you signed your lease before October 12, 2023, your rent can increase by up to:
If you signed your lease on or after October 12, 2023, your rent can increase by either:
The amount of rent you pay will change if the number of shares you own changes. Buying more shares reduces your landlord’s shares, so you’ll pay less rent.
See Staircasing below to learn more about increasing your ownership of the home.
You are allowed to paint, decorate, and refurbish shared ownership homes — get started by checking out our top 5 decorating tips for making your new build feel like home. Your landlord has no say over cosmetic improvements, though you may need written permission from your landlord to make structural changes. Generally, you should check with your landlord and the lease to understand what you need permission for.
Homebuilders often recommend holding off from decorating new-builds within their first year of construction because it gives the building materials time to settle and dry. Learn more about the pros and cons of living in a new-build in our blog: What It’s Really Like to Live in a New Build Home
You can increase your ownership of your property under shared ownership through a process called ‘Staircasing’. This is when you buy more shares, increasing the share of equity and reducing rent charges for yourself.
Staircasing highlights one of the main benefits of shared ownership schemes, which is that you can work your way up to owning property without such a heavy initial investment. Shared ownership and staircasing lower the prerequisites for getting onto the property ladder, then help you to climb it as your circumstances change.
Please be aware that some of our homes cannot be bought outright. On a limited number of developments, you will only be able to buy a share up to 70%, 75%, 80%, or 95%. Your lease includes information about staircasing restrictions, if there are any.
The price of extra shares depends on the value of the home at the time you want to buy them, and the number of shares you want to buy at once. There are two primary models, ‘Standard Staircasing’ and ‘Gradual Staircasing’.
Via standard staircasing, you can buy shares in chunks of 5% or more. The extra shares on Plumlife’s shared ownership developments come in chunks set out in your lease, usually 20% or 25%.
The price of these shares is based on the current market value of the property, so you must pay for a valuation beforehand. You may also have to pay some admin fees to your landlord.
Via gradual staircasing, you have the option to buy 1% per year for the first 15 years of your time in the property at a price based on the property’s original value, accounting for the House Prices Index. This resets on each resale (i.e. not the first 15 years of the property). This is only applicable on newer leases, please check yours to see if this option applies to you.
Plumlife offers staircasing and outright purchasing on many of our developments, allowing you to own up to 100% of the shares of your property over time. Check out our range of shared ownership developments and finance options online today.
You always have the option to sell your shared ownership home, no matter how many shares you own.
If you own 100% of your home, then you can usually sell it on the open market like you would any other type of home. If you partially own your home, then you must tell your landlord of your intention to sell. This then gives your landlord time and opportunity to find a buyer for your share.
At Plumlife Homes, we are dedicated to getting people into quality properties at affordable prices. Shared Ownership is a great way to start your home-owning journey or re-enter the market. View our range of shared ownership properties online, and check out our eligibility and affordability tools below.
Our Developments Affordability Checker Eligibility Checker
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