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Shared Ownership – the answer to the UK’s home ownership problem?

With home ownership dropping in major UK cities from 71% in 2003 to just under 64% in 2016[1] and millions still struggling to make their dream of home ownership a reality, could Shared Ownership be the answer in helping aspiring homeowners take that vital first step onto the housing ladder? With the Government pledging £4 billion to build an additional 135,000 Shared Ownership homes by 2021[2], the scheme is only going to become more popular as people seek a mainstream alternative to help them purchase their first home in areas where they are currently priced out of the market. However, are customers really aware of the ins and outs of the scheme and are brokers ready to advise them?

The latest blog in our series on the New Build market, takes a look at some of the essentials brokers need to know before advising on Shared Ownership properties.

It’s become easier to be eligible

In April, the Government raised the maximum household income threshold from £60,000 to £80,000[3], rising to £90,000 in London, opening the scheme out to 175,000 more households[4]. As part of these rule changes, the Government also removed some other restrictions, including priority being given to key workers and councils being able to set their own restrictions.

This has meant that the scheme has become much more inclusive, and has transformed Shared Ownership from something available to a select few, to helping those on higher incomes who still struggle with affordability in the housing market.

It can be cheaper than renting

With just a 5% deposit needed and the option to purchase a share of between 25% and 75% of the property, shared ownership is becoming an attractive choice for those who would like to get on the housing ladder but who are struggling to buy a suitable property on the open market. Furthermore, a report by the National Housing Federation found that average shared ownership monthly payments were lower than rent or full ownership[5] in all regions of the UK except the North East, making it an attractive prospect for those trapped renting. Buyers also benefit from paying off their mortgage at the same time as paying their rent, meaning they are building up equity in the property that would be non existent if they were simply renting.

It’s not for homes in less desirable areas

Average rents in London hit £1,250 in 2016[6], meaning it’s no longer just those on lower incomes who are being priced out of the housing market. It’s estimated that by 2020 a typical first time buyer in London will need to earn a £64,000 salary to purchase their first home[7], meaning there is a growing number of buyers on higher incomes unable to take their first step onto the housing ladder.

To cater to this growing number of potential buyers, a number of shared ownership properties have sprung up in sought after areas, meaning the scheme is no longer just available in the less desirable parts of town. A one bedroom apartment in sought after Wandsworth, London for example, is available for £172,375 for a 35% share through Shared Ownership.[8]

It can lead to owning the home outright… but doesn’t have to  

A key feature of shared ownership is the ability for homeowners to increase their equity by purchasing further shares on the property, an option called staircasing. This could lead to the buyer eventually owning their home outright. However, this isn’t an option often taken by all users of the scheme. Some homeowners under the Shared Ownership scheme tend to use their equity growth to buy outright later on in life. This is especially common in areas such as Central London, where prices are higher.


For more information about Leeds Building Society’s Shared Ownership offering, or to speak to one of our team about general enquiries or specific cases call 03450 50 5555. We may monitor and/or record your telephone conversations with the Society to ensure consistent service levels (including colleague training).






[5] Most recent data -




This article contains public sector information licensed under the Open Government Licence v3.0