Can I really buy a Shared Ownership home with as little as a £5,000 deposit?
Yes, you can buy a Shared Ownership home with a deposit as low as £5,000, depending on the share you buy. The deposit is typically just 5% of the share price, which typically starts from a 25% share not the full property value. So, for example, a 25% share of a £400,000 home would require a 25% mortgage of £100,000 with a 5% deposit of £5,000.
At Beaufort Park in North West London, one and two bedroom apartments start from £98,750 for a 25% share of a £395,000 home, requiring a 5% deposit of £4,938. Each home comes with a superb specification, private outdoor space, and is within walking distance of Colindale tube station. In Margate, the newly launched Hartsdown Gardens development offers spacious two, three and four bedroom houses from £87,500 for a 25% share, with a 5% deposit of £4,375, just minutes from the coast with direct train links to London, private gardens, and parking.
Won’t a low deposit mean I always pay a lot of rent and service charges? How can I avoid this?
A low deposit means you start by owning a smaller share, so you’ll pay rent on the rest, along with any service charges. However, you can reduce your rent over time by buying more shares in the property through a process called staircasing. The more of the home you own, the less rent you pay.
Can I use the ‘Bank of Mum and Dad’ to help me get a bigger deposit?
Yes, you can receive financial help from family members to increase your deposit. Many buyers use gifted deposits from parents or other relatives, which must be properly documented for mortgage purposes.
I’ve heard Shared Ownership homes are hard to sell. Is that true?
Shared Ownership homes aren’t necessarily hard to sell, but the process differs from full ownership. If you haven’t staircased to full ownership, your housing provider will have the first opportunity to find a buyer for your share. Once you own 100%, you can sell on the open market, although some homes might have lease restrictions.
Is it possible to move into a Shared Ownership property if you have children?
Yes, Shared Ownership is open to individuals, couples, and families with children. Places for People offer a wide range of family-friendly developments with spacious homes and affordable options. In Burgess Hill, Abbeville Park has two, three and four bedroom houses available from £108,750 for a 25% share of a £435,000 home with a 5% deposit of £5,437, featuring private gardens, generous rooms, and local amenities.
Darwin Manor in Derby offers three and four bedroom houses from £85,500 for a 30% share of a £285,000 house, with a 5% deposit of £4,275, combining modern living with easy access to the countryside, and the Peak District.
What if I get a job in another country or need to move away from the area?
If you need to relocate, you can put your property up for sale. If you haven’t staircased to 100%, you will sell your share, and the housing provider will help you find another eligible buyer. Full owners can sell on the open market, subject to lease conditions.
Is it ever ‘too early’ to do Shared Ownership?
Shared Ownership is designed to be a flexible way onto the property ladder, and you can staircase at your own pace when your finances allow. You’re not required to buy more shares until you’re ready.
Am I able to make the place my own with painting and decorating if I buy through the scheme?
Yes, you’re free to decorate and make minor cosmetic changes like painting, putting up shelves, or changing light fittings via the scheme. For major work, such as structural changes, you’ll need permission from the housing provider and potentially planning approval.
What happens with ‘staircasing’? Is it easy to fully own my own property?
Staircasing is the process of buying more shares in your home over time. It can be done gradually, even by as little as 1% a year in some cases, or in larger chunks. Once you staircase to 100%, you become the full owner and stop paying rent, although some costs like service charges may remain.
Are there any other hidden costs I should be aware of?
Beyond the initial deposit and mortgage payments, you’ll pay rent on the share you don’t own, plus service charges and ground rent, which contribute to communal maintenance. These charges can vary and sometimes increase annually. You are responsible for internal repairs. Staircasing may incur valuation and legal fees, and lease extensions can involve additional costs.
What would my responsibilities be, are there any that differ from typical ownership?
With Shared Ownership, you become a leaseholder owning a percentage of the property but not the land, which remains with the housing association or freeholder. You pay rent on the remaining share, service charges, and ground rent. Major alterations usually need permission. Subletting may be restricted. You handle internal maintenance, while the housing association manages communal areas.
I am a leaseholder rather than a freeholder if I buy with Shared Ownership, right?
Yes, Shared Ownership makes you a leaseholder, owning the leasehold interest for a specified term (often 99 or 125 years). The freeholder (housing association) owns the land and building structure, which is why you pay rent on the share you don’t own. Understanding leasehold terms is important before committing.
Do I have to have the property for a certain period of time before I can sell?
Typically, you must live in the property as your main home for a minimum period, often around five years, though this varies. When selling, you usually offer your share back to the housing association first, which often has the right of first refusal to buy your share before you can sell on the open market. This keeps properties affordable for future buyers.
Is it true that pets aren’t always permitted?
Pets are allowed in many Shared Ownership properties but some have restrictions. This is due to the lease and management rules which often prohibit pets in flats or managed developments due to communal living considerations. Houses or less communal settings may permit pets with conditions. We would advise that you check the specific property rules before committing.
To find out more about Shared Ownership with Places for People go to placesforpeople.co.uk