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Shared Ownership – What is it? How does it work?

Shared Ownership is a scheme that helps first time buyers and home movers purchase a percentage of a home. Partial homeownership is a great way to get onto the property ladder if you cannot afford a 100% mortgage.

Shared Ownership Mortgage Advice in Birmingham

What is shared ownership?

Shared Ownership let’s take out a mortgage on/purchase a percentage of a property and then pay the remainder through rent. Depending on the building society, the percentage that you can own will change. Some will allow you to own as little as 10%, whereas others will need you to own 25%-75%.

Since you’re taking out a mortgage based on a percentage of a property, the initial deposit that you have to put down should be less. This can make it easier to get onto the property ladder.

How does the scheme work?

First of all, you need to put down a deposit on the property. The minimum deposit that you have to put down can vary on different factors. It can change with the percentage that you’re buying, your credit score, and your personal and financial situation.

You’ll still be taking out a mortgage through this scheme, but only on the percentage that you’re buying. For example, if you’re buying 50% of a property that is worth £250,000, you’ll only need to take out a £125,000 mortgage. Furthermore, rather than providing a deposit that is based on the full house price, you’ll only have to put down a deposit based on the mortgage that you’ve taken out. So, in this example, a 5% deposit would be £6,250.

Once you’ve had your offer accepted and have moved into the property, you’ll start paying off your mortgage. As mentioned before, you will have to also pay rent on the remaining share of the property. Despite having two sets of payments, your overall monthly costs shouldn’t be as expensive as if you had taken out a 100% mortgage.

Costs and fees

When taking out any type of mortgage, there are going to be lots of different costs that you’ll need to consider. Shared Ownership mortgages will likely come with set-up/arrangement charges, booking and solicitor fees. You may receive stamp duty tax too, so make sure that you’re aware of these costs.

Costs can increase depending on the property that you’re buying. Deposit size, monthly payments, arrangement fees can differ from property to property.

How can I apply?

You’ll have to meet the requirements for the Shared Ownership scheme before you can access it:

  • You have to be at least 18 years of age.
  • If you live out of London, your total household annual income must be less than £80,000. If you live in London, this is changed to less than £90,000.
  • You can’t own another property during your Shared Ownership application. You must be a first time buyer in Birmingham or in the process of selling your current property.
  • If you can afford to purchase a property on the open market, you will not be able to access this scheme. It was designed to help struggling applicants.
  • You must prove that you are not in any kind of arrears, this includes mortgages and rent.
  • You must provide evidence that supports a good, clean credit history. This means that you will struggle if you have a CCJ (county court judgement) associated to your name or have had previous credit problems.


Although this may appear like a lot, it’s only the same as most Help to Buy schemes. Each schemes’ requirements will differ, as they are targeting different applicants.

If you have credit problems, you may need to look at other ways to get a mortgage. There are lots of different government mortgage schemes out there that could help you get a mortgage.

Speak to a Shared Ownership Mortgage Advisor in Birmingham

Our mortgage advisors in Birmingham have helped many buyers secure a mortgage through the Shared Ownership scheme. We have been helping applicants for over 20 years now!

If you are looking for Help to Buy mortgage advice in Birmingham, we are here to help you too. We can check whether you match the requirements for any of the schemes.

Take advantage of our free mortgage consultation by booking your own appointment today.

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