Steps to shared ownership

According to the Department for Communities and Local Government, first-time buyers pay an average of £167,314 for their first home. For first-time buyers unable to afford this, shared ownership schemes offer an alternative way to invest in property. Here's how shared ownership works.

1. Know the basics
Shared ownership is a scheme which allows first-time buyers to buy a percentage of a property and pay a small amount of rent on the rest. You do not have a landlord, and are fully responsible for the property. All properties sold under the shared ownership scheme are leasehold properties, normally with a lease of ninety-nine years.

2. Qualification
Qualification for shared ownership varies depending on which housing association or property company you go through, but generally key workers, first-time buyers unable to buy a property outright and lower income couples will be prioritised. Other applications will be considered but will not be seen as a priority.

3. Applications
Applications are handled by your local council or housing association, or through a private development offering shared ownership options. Choose your path and contact them directly to get more information and an application form.

If you are considered suitable for the scheme, you will usually be asked to meet someone in person to discuss your application further. The time taken to process your application depends on current demand - check recent property sales to gauge the market activity.

4. Finding a property
Not all properties on the open market are eligible for shared ownership. Schemes have taken off more in London and the South East where property prices are higher. When you do find a property, you should decide on the percentage of shares you want to buy.

5. Arranging a mortgage
Research your options before deciding on which mortgage to apply for. Look at a number of different banks and building societies, even if you do not have an account with them. Your housing association can also help you in recommending mortgage providers, or read our guide to applying for a mortgage for tips.

6. Rent
As you are only buying a percentage of the property, you will be expected to pay rent on the rest. This should be taken into consideration when setting your budget and mortgage. The rent you pay decreases if you decide to increase the share you own.

7. Staircasing
Most shared ownership schemes allow buyers to purchase further shares, usually in 25% portions. To do this, the property will be revalued and shares sold to you at the current property value. If you are arranging a mortgage for the new share rather than buying it outright, the process can take up to three months.

Not all schemes allow for staircasing, so it's important to check at the time of purchase if buying future shares is possible.

8. Selling
Selling your share of the property can have certain restrictions. You will usually need to give the housing association or management company notice before you leave, during which time they have the right to look exclusively for a buyer.

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