When is Shared Ownership a good idea?

Wondering whether Shared Ownership is for you?

For many people, Shared Ownership provides an affordable first step onto the property ladder. It significantly reduces the initial deposit required by reducing the portion of the home being purchased.

The lower barrier to entry makes the scheme an attractive option to many people with high monthly costs who may otherwise struggle to purchase their own home. If you are someone who currently rents a home at a high monthly cost, and saving for a deposit is a struggle, Shared Ownership may provide a valuable first step onto the property ladder.

The deposit you require for a Shared Ownership mortgage is calculated according to the percentage share you are buying, for example:

To purchase a home worth £250,000 outright, a 10% deposit would require a down payment of £25,000. To purchase 40% of the same home through Shared Ownership could only require a 10% deposit of £10,000, a 60% decrease in the required down payment. The actual deposit you
require will depend on your individual circumstances and mortgage lender criteria, but could be as low as 5% based on the value of the share you intend to buy. Similarly the remaining mortgage value in this instance would amount to £90,000 for the 40% buyer instead of £225,000 for the outright purchase, keeping monthly mortgage payments affordable.