Shared ownership resale explained

If you live in England and are struggling to find an affordable home on the open market, you may be able to get help through a shared ownership resale scheme. This guide gives you an overview of how shared ownership resales work, who is eligible, possible pitfalls and questions you need to ask before applying.

The Basics

• Shared ownership resale schemes allow you to buy a shared ownership home that has previously been lived in and is being sold on through the same scheme.
• The homes vary greatly in terms of age, size and type.
• You would buy the previous owner’s share either outright or by securing a mortgage. The housing association will own the remaining share. You will pay them rent on the share you don’t own.
• Over time you can buy more shares, this is known as staircasing. In most cases, you can buy up to 100% of the property, although some housing providers limit the amount of shares you buy. Find out more with our guide to staircasing your shared ownership home.
• You are not restricted to buying the share that the owner currently owns. If you can buy more, you will be able to do so.
• It is possible to buy new shared ownership homes. Find out more information including the pros and cons in our guide What is shared ownership? Is it worth it?

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Am I eligible?

To be eligible to buy a shared ownership property:

• Your household income must be £80,000 a year or less, or if you want to buy in London, your household income must be £90,000 or less.
• You must not be able to afford to purchase a home on the open market.

Plus, you must meet one of the following criteria:

• You’re a first-time buyer.
• You used to own a home but can’t afford to buy one now.
• You’re forming a new household – for example, after a relationship breakdown.
• You’re an existing shared owner and you want to move.
• You own a home and want to move but cannot afford a new home that meets your needs.

But to make it more complicated, there are further eligibility criteria, which differ depending on the housing association the property is offered through.

How does it work?

• You secure a mortgage to buy a share of the shared ownership property.
• You will have to put a deposit down on that mortgage, often between 5% and 15% of the value of your share of the property. You can find out more with our guide to shared ownership mortgages.
• In addition to owning that share, you will pay rent on the remaining share.
• You can buy more of the home by “staircasing” i.e. increasing your share. This in turn will reduce your rent.
• The minimum share you can buy when staircasing depends on which shared ownership scheme the property was built under. Find more on this and the fees involved in our guide Staircasing shared ownership explained.

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Should I do it?

• The first step in deciding whether or not to buy a shared ownership resale property is to do your research properly, starting with the various costs involved. For example, service charges and rents can spiral, and you should also investigate what repair costs you’ll be liable for. Read more detailed information in our guide What is Shared Ownership? Is it worth it?
• You can sell your shared ownership home at any time, although the selling process works differently depending on whether you own 100% of the property or not. Read more in our guide Selling a shared ownership property.
• You will not be able to rent out the entire property unless you own 100% of it or have your landlord’s permission – which is usually only given in exceptional circumstances. So if your situation changes, such as wanting to move into your partner’s place, your only options are buying the proportion you don’t own or selling your share.
• To avoid the risk of feeling trapped, be honest about the properties you are looking at. Think about living there for the next 5 years at least – is there enough storage, are you expecting to start a family in that time and so on. It needs to be liveable.
• Just because shared ownership is a government scheme doesn’t mean you get any more protection. It is your responsibility to keep up repayments on the mortgage, your rent and other costs such as the service charge.
• And don’t forget the additional costs of buying a home.

How do I do it?

If you’re buying a shared ownership resale property, this is how the process works:

1. Check if you meet the eligibility criteria to buy a shared ownership home.

We covered this above – jump to more on this.

2. Find a shared ownership resale property you want to buy.

Look for available shared ownership resale properties:

• Housing associations advertise shared ownership homes for sale on their websites and through their resale schemes.
• Some local councils advertise shared ownership homes for sale. Depending on the area, there may be additional eligibility criteria. For example, homes reserved for people who already have a local connection to the area. Find your local council.
• Property portals like Rightmove also list shared ownership resales.

3. Reserve your home

If you’re eligible to buy the home, you’ll pay a fee of up to £500 to the landlord to reserve it. This means no one else can reserve the home for a fixed period and this fee will be taken off the final amount you pay. This fee isn’t usually refunded if you don’t buy the home, so check this.

4. Instruct a conveyancer

You’ll need a solicitor or conveyancer to handle the legal side of your purchase. Make sure you choose a conveyancer who is experienced in the purchase of shared ownership properties.

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