Your Guide to Shared Ownership

Most shared owners pay three things every month. They come from different places and they move in different ways, which is why a single “what does it cost” number is hard to pin down.

The mortgage, on the bit you bought

This is an ordinary mortgage. Nothing about it is special to shared ownership except that it is smaller, because it only covers your share. Whether the payment is fixed for a few years or moves with interest rates depends on the deal you took, exactly as it would for anyone else.

The rent, on the bit you haven't bought

This goes to your landlord and covers the rest of the home. It is worth being clear that it is not the same as renting privately: it is usually set well below what the open market would charge, and the way it can go up is written down in advance rather than being up to whoever owns the building.

That is the important part. Your lease contains a clause explaining exactly how the rent is worked out, how often it can change, and what any increase is tied to. Nobody can change that formula on a whim — but the formula itself does allow the rent to rise, so it is worth reading yours rather than assuming.

The service charge, for looking after the building

This pays for the things nobody owns individually — fixing the roof, insuring the building, cleaning the stairs, cutting the grass, lighting the corridors. Your landlord collects it and spends it on the building; it is not profit for them, and you are entitled to ask for a written breakdown of where it went.

The two things that catch people out

The first is that buying a bigger share does not simply make everything cheaper. Your rent goes down, because you are renting less of the home, but your mortgage goes up, because you have borrowed more. The overall monthly cost usually still improves, just by less than the drop in rent alone suggests. Always look at the two numbers together.

The second is that the service charge is the least predictable of the three. It follows what the building genuinely costs to run in a given year, so a major repair can push it up in a way your mortgage and rent never would. That is not shared ownership being unfair — every leaseholder in the country is in the same position — but it is the bill most likely to surprise you.

Almost every answer is in there

Ask a shared owner question and the honest answer is usually the same: it depends what your lease says. Not what a guide says, not what a neighbour was told by a different landlord, and not what was true for someone who bought five years earlier.

Your lease is the agreement you signed when you bought. It decides how long you have the home for, how the rent can go up, whether you can knock a wall through or keep a dog, whether you can let a room out, how big a chunk you are allowed to buy at a time, and what has to happen before you can sell. Two flats on the same street, with different landlords or from different years, can have genuinely different answers to all of those.

The countdown nobody mentions at the viewing

Because your home is leasehold, your right to live there runs for a set number of years, and that number gets one smaller every year. When it was granted it was probably long enough not to feel real.

It starts to matter when the remaining years get low, because banks become reluctant to lend against a home whose lease is running out — which makes it harder to sell, because your buyer needs a mortgage too. Leases can be extended, and that costs money, so people who know about it tend to sort it out long before it becomes urgent rather than in the middle of trying to move.

Getting a straight answer about your own

Leases are long, repetitive and written for lawyers rather than for the person living in the home. Almost nobody reads theirs from end to end, which is completely reasonable and also why so many people are unsure what they are allowed to do.

If you want a straight answer about yours specifically, upload it and ask. You get back what your document actually says, with the clause it came from, rather than what is usually true of leases in general.

Buying in stages

You do not have to stay on the share you started with. You can buy more of your home later, and again after that, until eventually you own the lot. The industry calls this staircasing, which is a slightly odd word for a simple idea: going up a step at a time.

People usually do it for one of two reasons. Either their income has improved and they can afford a bigger mortgage, or they want to bring the rent down — and since rent is only charged on the part you have not bought, buying more of it is the one thing that reliably reduces it.

What it costs

The price is based on what your home is worth now, not what you paid for it. A qualified surveyor values the property and that valuation sets the price of the extra share. If the home has risen in value since you bought, the next share costs more than the first one did. If it has fallen, it costs less. The valuation only lasts a limited time, so once you start there is a clock running.

The share itself is not the only cost. You will also be paying for the valuation, your solicitor, your landlord's administration fee and whatever your mortgage lender charges. Stamp duty might come into it too, depending on your circumstances and on a decision you may have made without noticing when you first bought — your solicitor can tell you where you stand.

What changes once it is done

You get a new lease reflecting the bigger share, your rent drops, and your mortgage payment goes up because you have borrowed more. Whether you are better off month to month depends on the two together, which is exactly what the calculator on our staircasing page works out for you.

The whole thing usually takes a few months rather than a few weeks, because a valuation, a mortgage, a solicitor and your landlord's approval all have to line up. Getting your paperwork together before you start is the single thing most likely to make it quicker.

Your landlord goes first

You can sell a shared ownership home whenever you like, but not quite in the way you would sell an ordinary one — and the difference is worth knowing before you agree a moving date with anyone.

You tell your landlord first. They then get a set stretch of time to find a buyer themselves, from their own waiting list of people approved for shared ownership, before you are allowed to put the home on the open market. The industry calls this the nomination period. The thinking is that the home stays available to someone else who needs an affordable route in — which is fair enough, and it does mean the start of your sale is not under your control.

You do not pick the price

A surveyor values the home and that valuation sets what it goes on the market for, in the same way it does when you buy a bigger share. While your landlord is looking for a buyer you generally cannot ask for more than that figure, so there is no point in trying your luck with an optimistic asking price.

If their period runs out with nobody found, you can usually go to an estate agent and sell it yourself. From there it feels much more like a normal sale, though your lease still applies and your buyer still has to be someone your landlord will accept.

What it will cost you

There is a valuation fee and your landlord's administration fee for selling near the beginning, then legal fees and any estate agent commission at the end. These vary quite a bit between landlords, so ask yours for the figures in writing before you set anything in motion.

When it completes you are paid for your share of the sale price, not the whole thing, with your mortgage paid off out of it and the fees taken off. If the home has gone up in value, that gain on your share is yours.

Most things a shared owner gets stuck on are answered by one of four places. Going in roughly this order saves a lot of time and occasionally a lot of money.

First, your lease

It sounds like a dodge, but it genuinely is where most disagreements end up. Whether you can do the thing you want to do, and what your landlord is allowed to charge you for, is usually written down in there already. If you cannot follow the wording — and it is not written to be followed — upload it to Stairpay and ask in plain English.

Then your landlord

They hold the service charge accounts, the sums behind your rent review and the selling process, and they have to explain what you are being charged for if you ask. Ask in writing and keep the reply, because the reply is what you will need if the answer turns out to be wrong.

A professional, for anything you are signing

A mortgage broker who has done shared ownership before will tell you what you can realistically borrow rather than what a comparison site guesses. A solicitor who knows these leases will notice the clauses a general conveyancer reads straight past. On something this size, the fee for someone who has seen it all before is usually the cheapest part of the transaction.