Finding an affordable home to buy has become increasingly difficult for people throughout the UK. The rising cost of living plays a major role, but the limited number of properties on the market is equally problematic.

When you cannot find something suitable within your price range, shared ownership offers an alternative path forward. For many people, shared ownership provides a way to leave renting behind and begin building equity in a property of their own.

While it can lead to full ownership eventually, you need to think carefully about the positives and negatives before taking on this level of financial responsibility.

How shared ownership works

Housing associations run most shared ownership programmes, and they are typically reserved for people buying their first home. These schemes help lower earners get onto the property ladder by reducing the deposit needed and splitting ownership between the buyer and the housing association.

Here is how it works: instead of getting a mortgage for the entire property, you only borrow enough to cover your chosen percentage. Choose a 25% share of a £200,000 home, and you will need £50,000 for your deposit and mortgage. The housing association owns the other 75% (£150,000), which you pay rent on each month.

You are not limited in what you can buy. New builds qualify, as do existing shared ownership homes being resold. Your initial share is purchased through a combination of mortgage and deposit.

Pros and cons to consider

The biggest draw of shared ownership is the smaller mortgage requirement. Your monthly mortgage payments will be much lower than if you bought the whole property. For renters struggling to save money, this creates a realistic path forward.

However, you should assess your finances thoroughly before committing. Rent and interest rates can rise over time. If your property does not grow in value at the same pace, you could find yourself trapped in an arrangement that no longer works for you. Speaking with a conveyancing solicitor in Portsmouth helps ensure you understand everything before signing any contracts.

What happens later?

If you keep up with your payments, you may be able to purchase more of the property over time. This process, called staircasing, lets you gradually increase your ownership share while your monthly payments adjust accordingly.

You can sell whenever you want. If the property has gone up in value, you profit from your share of that increase. That 25% share worth £50,000 in a £200,000 property becomes worth £60,000 if the property sells for £240,000.

Ready to explore shared ownership?

Andrew & Andrew Solicitors offer efficient and affordable legal services for every type of conveyancing transaction, including shared ownership purchases. Our team takes care of all the legal details involved in buying or selling, so you can concentrate on your new home.

We are available to help whenever you need us.

Get in touch with our team to begin.

Andrew & Andrew Solicitors proudly serve clients across Hampshire from our Portsmouth, Emsworth, and Wickham offices.