Am I Eligible For Shared Ownership?

The Shared Ownership scheme is a helpful way to get onto the property ladder if you’re struggling to buy a home. However, you need to meet certain eligibility criteria to be considered for this scheme.

Understanding the eligibility criteria is important if you’re considering this scheme. It can be a good option if you have a small deposit and is an excellent way to transition between renting and owning a home outright.

Whether you’re a first-time buyer or someone looking to re-enter the housing market, we’ll guide you through the requirements and what to expect when getting a Shared Ownership mortgage.

What is Shared Ownership?

Shared Ownership is a housing scheme primarily aimed at first-time buyers who may be unable to purchase a home outright. It allows you to buy a share of a property (usually between 25% and 75%) and pay rent on the remaining share, which a housing association owns.

Over time, you can buy more shares in your home in a process known as ‘staircasing,’ potentially owning it outright. The scheme makes homeownership more accessible as it requires a smaller deposit than buying a home outright.

You can get a Shared Ownership on new builds, existing properties, and flats. However, the scheme is only available on specific properties via a housing association. You won’t be able to apply for the scheme on any house you wish. It’s important to note that all Shared Ownership properties, even houses, are leasehold.

Am I eligible?

Shared Ownership isn’t available to everyone with certain criteria applying. To be able to lodge an application, you need to meet both of the following criteria:

• You have a household income of £80,000 or less (£90,000 in London)
• You’re unable to meet all the deposit and mortgage payments for a home that meets your needs

If you meet these two points, you also need to meet one of the following criteria:

• You’re a first-time buyer
• You previously owned a home but can’t afford to now
• You’re a shared owner who’s looking to move
• You’re establishing a new household after splitting up with a partner, for example
• You own a home and are looking to move but can’t afford to buy a new home that meets your needs

Certain eligibility criteria will depend on the local housing association you’re applying to. For instance, you might need to show that you live or work in the area you want to buy in. To see if you’re eligible for the scheme, take this quiz.

There are different rules for those living in Northern Ireland, Scotland, and Wales. Before you apply, it’s worth examining the specific rules and how they differ from those in England.

Who else can apply?

If you don’t meet the above criteria, there are other schemes you can apply to instead. Some of these are listed below:

If you own a home

If you currently own another property, you will need to sell it on or before the date you complete the purchase of your shared ownership home. To evidence this, you must have:

• Formally accepted an offer to sell your current property. This is known as ‘sold subject to contract’ or ‘STC.
• Have written confirmation of the sale, known as a Memorandum of Sale, which includes your intention to sell and the price.

Older people

If you’re over 55, you can buy up to a 75% share of a house through the Older Persons Shared Ownership scheme. You won’t have to pay rent on the remaining 25% once you own 75% of the property.

Disabled people

If you have a long-term disability, you can apply for the Home Ownership for People With Long-Term Disabilities (HOLD). This is a good idea if other schemes don’t meet your needs, for example, if you need a ground-floor home.

Am I eligible for Shared Ownership if I’m self-employed?

Yes, you’re eligible for Shared Ownership if you’re self-employed. However, lenders will need to see a good track record of earnings in the region of 2 to 3 years. It will be difficult to find lenders who consider Shared Ownership and self-employment.

That’s why it’s a good idea to speak to a mortgage broker who specialises in this area. They can guide you through the process.

Can you get a Shared Ownership mortgage with bad credit?

Yes, you can get a Shared Ownership mortgage with bad credit, but it will depend on your circumstances. Your application is unlikely to be denied if you have late payments or no credit history. However, if you have bankruptcy or repossession on your credit history, your application will be examined more thoroughly.

The above will depend on your local housing association and its specific criteria. However, you can contact a broker who specialises in this field and can find the best solutions for your specific case.

Is Shared Ownership a good idea?

Shared Ownership is a good option if you can’t afford to buy a home outright. It requires a smaller deposit and reduces initial costs by allowing buyers to purchase a portion of the property and pay rent on the remainder.

Shared Ownership offers the flexibility to increase ownership over time through staircasing and lower monthly payments initially. However, it also has limitations, such as a restricted choice of properties, responsibility for full maintenance despite partial ownership, potential complexities in selling, and possible rent increases linked to inflation.

You also need to factor in the rent you pay to the housing association and potential ground rent or service charges you might have to pay. This can affect your affordability, so speaking to a broker to see whether the costs of Shared Ownership are affordable for you given your circumstances is a good idea.

Before you decide, it’s important to consider the pros and cons of shared ownership and whether it aligns with your financial situation and housing needs. You can also use our Shared Ownership calculator to get an estimate of what your monthly payments might be.

How a mortgage broker can help

Whatever your circumstances, if you think Shared Ownership is the right decision, your best bet is to speak to a broker to understand your borrowing options and how much a mortgage will likely cost.

Using our broker-matching service, you can find a mortgage advisor who fits you best. We can quickly assess your needs and circumstances and match that information with a broker with a strong track record securing Shared Ownership mortgages for people like you.

With our broker matching service, we’ll assess your circumstances and match you with a broker who has a comprehensive understanding of this market and which lender is right for you. To get matched with your ideal broker, call 0330 818 7026 or enquire online.