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Shared Ownership

Shared Ownership Conveyancing

Shared ownership offers an opportunity to step onto the property ladder by purchasing a share of a home while paying rent on the remaining portion. Specialist conveyancing support ensures the legal process is handled efficiently from reservation through to completion.

Affordable Home Ownership Support

Understanding Shared Ownership

Shared ownership is a government-supported home ownership scheme designed to help people purchase a property who may not be able to afford to buy a home on the open market. Rather than purchasing the entire property outright, buyers acquire a percentage share of the property while paying rent on the portion retained by the housing association.

Over time, owners may have the option to purchase additional shares in the property. This process is known as staircasing and allows the homeowner to gradually increase their ownership stake, sometimes eventually owning the property outright.

Shared ownership properties can be either new build homes within a development or resale properties that are already owned by another shared ownership leaseholder. Both types follow a similar legal process but may involve different documentation and timescales.

Once you have identified the property you wish to purchase, a reservation fee will normally be paid to the developer or housing association. At this stage, a conveyancer is instructed to begin the legal process and ensure all necessary checks are carried out before exchange of contracts. 

Speak to a Shared Ownership Specialist

Understanding the Process

New Homes Law Shared Ownership Steps

Purchasing a shared ownership property involves several legal stages that must be completed before the transaction can progress to exchange of contracts and completion. The process is similar to a traditional property purchase but also includes additional steps involving the housing association.

From reviewing the contract documentation and mortgage approval through to exchanging contracts and completing the purchase, each stage is carefully managed to ensure the transaction progresses smoothly. Below is an overview of the key steps involved when purchasing a shared ownership property.

Receive instruction, identification and monies on account from the client to formally begin the conveyancing process. Contract papers will then be requested from the developer’s solicitor so the legal documentation relating to the property can be reviewed. During this stage, proof of deposit funds will also be requested from the client and all necessary property searches will be applied for with the relevant authorities.
Step 1
Step 1
Prepare a detailed contract report for the client once the developer’s contract papers and initial search results have been reviewed. This report will be sent to the client for careful consideration and signing where required. Any questions or enquiries raised by the client will then be addressed to ensure they fully understand the terms and conditions of the purchase before moving forward.
Step 2
Step 2
Where the client is purchasing the property with the assistance of a mortgage, a copy of the formal mortgage offer must be received at this stage. Once received, a mortgage report will be prepared explaining the terms of the loan. This report, together with the mortgage deed for signing, will then be sent to the client so the necessary documentation can be completed.
Step 3
Step 3
Once all signed documentation has been returned by the client and the exchange deposit has been received, authority will be requested from the client to exchange contracts. Contracts may be exchanged on notice where the property is still under construction, or with a fixed completion date where the property has already been completed and handed over by the developer.
Step 4
Step 4
Following confirmation of the client’s authority, contracts will be formally exchanged with the developer’s solicitor. At this point the client becomes legally committed to the purchase of the property. Failure to complete the transaction after exchange could result in the loss of the exchange deposit and may also lead to additional financial penalties or interest charges.
Step 5
Step 5
The client will be notified once the exchange of contracts has taken place so they are aware the transaction has become legally binding. The lease or transfer document will then be issued to the client for signing. Communication may reduce slightly until closer to completion, however support remains available should the client have any questions during this period.
Step 6
Step 6
Once a completion date has been confirmed, a completion statement will be sent to the client outlining the remaining balance of funds required to complete the purchase. The mortgage advance will be requested from the lender in preparation for completion, and the necessary pre-completion searches will also be carried out, including bankruptcy and K16 searches.
Step 7
Step 7
When all funds have been received from both the client and their mortgage lender, the full completion funds will be transferred to the developer’s solicitor. Once confirmation has been received that these funds have been received, legal completion will take place. The client will then be able to collect the keys to their new home at a time agreed with the developer.
Step 8
Step 8

Step 1

Receive instruction, identification and monies on account from the client to begin the conveyancing process. Contract papers will then be requested from the Housing Association’s solicitor so the legal documentation relating to the property can be reviewed. During this stage proof of deposit funds will also be requested from the client and all necessary property searches will be applied for.

Step 2

Prepare the client contract report once the contract documentation has been received and reviewed. This report will be sent to the client for consideration and signing where required. Any questions or enquiries raised by the client will be addressed to ensure they fully understand the legal terms before proceeding further.

Step 3

Where the client is purchasing with the assistance of a mortgage, a copy of the mortgage offer must be received at this stage. A copy of the mortgage offer will also be provided to the Housing Association or their solicitor for approval. A mortgage report and mortgage deed will then be sent to the client for signing while awaiting approval and the return of all documentation.

Step 4

Once mortgage approval has been received from the Housing Association or their solicitor, together with all signed documentation and the client’s exchange deposit, authority will be requested from the client to exchange contracts. Contracts may be exchanged on notice if the property has not yet been handed over, or with a fixed completion date if the property is ready.

Step 5

Once authority has been received from the client, contracts will be formally exchanged with the Housing Association’s solicitor. At this stage the client becomes legally committed to purchasing the property. Failure to complete the purchase after exchange may result in the loss of the exchange deposit and could also incur additional financial penalties.

Step 6

The client will be notified once the exchange of contracts has taken place. The lease or transfer document will then be issued to the client for signing. Communication may reduce slightly until the completion stage approaches, however support remains available should the client have any questions during this time.

Step 7

Once a completion date has been confirmed, a completion statement will be sent to the client outlining the remaining balance required to complete the purchase. The mortgage advance will be requested from the lender in preparation for completion and the necessary pre-completion searches will also be carried out.

Step 8

Once all funds have been received from the client and their mortgage lender, the completion funds will be transferred to the Housing Association or their solicitor. When confirmation is received that the funds have been received, legal completion will take place and the client will be able to collect the keys to their new home at a time agreed with the Housing Association.

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Who Can Apply

Shared Ownership Eligibility

Shared ownership is one of the longest established affordable home ownership schemes in England. It allows eligible applicants to purchase a share of a property while paying rent on the remaining share owned by the housing association.

To qualify for the shared ownership scheme, applicants generally need to meet specific criteria. This typically includes being a first-time buyer, an existing shared owner looking to move, or someone who previously owned a property but cannot currently afford to buy a suitable home on the open market.

Eligibility is assessed through the housing association or local authority in the area where the property is located. As part of the application process, financial circumstances and current housing arrangements will be reviewed to determine whether the scheme is appropriate.

Applicants must usually have a household income below £80,000 per year (or £90,000 in London) and demonstrate that they cannot afford to purchase a property suitable for their housing needs through traditional home ownership.

A good credit history is also important, as buyers will typically need to secure a mortgage for the share of the property they are purchasing and provide a deposit to support the purchase. 

Request a Shared Ownership Quote

Starting Your Purchase

Buying a Shared Ownership Property

Once eligibility for the shared ownership scheme has been confirmed, buyers can begin searching for a suitable property. When a property has been identified, an expression of interest is submitted and the housing association will assess the application based on eligibility criteria and local housing requirements.

If the application is successful, the buyer will complete a reservation form and pay a reservation fee to secure the property. At this stage a list of suggested conveyancers is normally provided by the housing association, and a conveyancer must be appointed within a short timeframe to begin the legal process.

Following the reservation, a Memorandum of Sale is issued to both the buyer’s conveyancer and the housing association’s conveyancer, confirming the details of the transaction and allowing the legal process to begin.

Buyers must also arrange their mortgage during this stage. Most shared ownership purchases require contracts to be exchanged within approximately 28 days of reservation, meaning it is important to ensure mortgage arrangements and legal documentation progress quickly.

For resale shared ownership properties, a fixed completion date will usually be agreed. Where a property is still being constructed, contracts may be exchanged on notice, meaning completion will take place shortly after the property has been completed and notice has been served by the housing association. 

Request a Shared Ownership Quote

Understanding Your Lease

Shared Ownership Lease

All shared ownership properties are purchased on a leasehold basis, regardless of whether the property is a house or a flat. The lease used for shared ownership homes is a standard form approved by the Government’s Homes and Communities Agency.

The lease is a legally binding agreement between the leaseholder and the landlord, which is typically the housing association. It outlines the responsibilities and rights of both parties and sets out the terms governing the use of the property.

In addition to standard lease provisions, a shared ownership lease also contains specific clauses relating to the scheme. These include how rent is calculated, how staircasing works, and the procedure that must be followed if the property is sold in the future.

Mortgage lenders will also require an agreement with the landlord before completion. This agreement ensures that if mortgage payments are not maintained and repossession becomes necessary, the lender has the right to recover the property and sell it. 

Ask About Shared Ownership Leases

Understanding Ongoing Costs

Rent Reviews

When purchasing a shared ownership property, buyers pay rent on the share of the property that remains owned by the housing association. The rent payable is typically set out in the Memorandum of Sale and confirmed within the lease agreement.

For new build shared ownership properties, the initial rent is generally set at up to 3% of the value of the unsold share. For resale shared ownership homes, the rent payable will depend on the share currently owned and the share being purchased.

Rent reviews normally take place once a year, often in April, and increases are usually linked to the Retail Price Index (RPI). This means the rent is adjusted periodically based on inflation.

Shared ownership leases typically include an upwards-only rent review, meaning the rent will increase when reviewed but will not decrease. The lease documentation will provide detailed examples showing how future rent adjustments are calculated.

Learn About Shared Ownership Costs

Property Tax Guidance

Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax (SDLT) is a government tax that may be payable when purchasing property or land above certain thresholds in England and Northern Ireland. Different property tax systems apply in Scotland and Wales.

SDLT can apply to shared ownership purchases depending on the property value and the share being purchased. Buyers may have different options for how Stamp Duty is calculated depending on the structure of the shared ownership purchase.

Even where no tax is payable, a Stamp Duty return may still need to be submitted to HM Revenue & Customs (HMRC) following completion of the transaction.

Because tax rules can change, buyers should always refer to the official government guidance to confirm the most up-to-date SDLT rates and thresholds. 

View HMRC SDLT Guidance
Use HMRC SDLT Calculator

Staircasing

Shared Ownership Staircasing

As a Shared Ownership home owner, you can purchase more shares in your home. This is known as Shared Ownership Staircasing. Purchasing more shares after your initial purchase is completely up to you; it’s not something that you have to do. However, you can staircase if you’d like to reduce the rent you’re paying on the other share of your home.

As a Shared Ownership home owner, you can purchase more shares in your home. This is known as staircasing. Purchasing more shares after your initial purchase is completely up to you; it’s not something that you have to do. However, you can staircase if you’d like to reduce the rent you’re paying on the other share of your home.

If you are interested in purchasing additional shares of your home, you will need to speak to your Housing Association to get started. You will also need to get your property valued to find out the current market value. You are responsible for the cost of the valuation and it is important to bear in mind that a valuation only last three months. If you do not purchase additional shares within three months of your valuation, you will need to get your property re-valued.

Once you have purchased your additional shares, the rent you pay on the remaining shares owned by your Housing Association will reduce to cover the new share amount.

You may find that your lease sets restrictions on the number of times you can staircase, along with the minimum share you can purchase. This is usually 10% or 20%, unless it is the final share to reach 100%.

When you purchase more shares in your home, you can also expect to incur additional costs, including:

  • Valuation fees
  • Legal fees
  • Mortgage arrangement fees
  • Stamp Duty Land Tax (if you own an 80-100% share of your property)

When you staircase, you will be purchasing at least 10% of your property which may include you getting additional money from your mortgage lender.

Receiving an additional amount from your lender is known as a further advance. Alternatively, you may move to a new lender which is known as remortgaging.

Download our cost illustration quote

Get a clear and transparent breakdown of the legal costs involved in purchasing a new build property. This example quotation provides an outline of our fees and any associated disbursements, helping you understand the typical costs you can expect as part of your transaction.

Shared Ownership Purchase
Staircasing

Why Choose New Homes Law

Experienced Shared Ownership Conveyancing

Shared ownership purchases involve additional legal considerations compared with traditional property transactions. Working with experienced conveyancers ensures the legal process is managed efficiently while protecting your interests throughout the purchase.

Dedicated Conveyancer

Each client works directly with a dedicated conveyancer who manages the transaction from instruction through to completion.

Specialist Shared Ownership Knowledge

Experience working with housing associations ensures shared ownership transactions are handled efficiently and within required exchange deadlines.

Nationwide Coverage

Support is provided for shared ownership buyers across England and Wales, regardless of where the property is located.
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Start Your Shared Ownership Purchase

Speak With a Conveyancing Specialist

Purchasing a shared ownership property involves a number of legal stages that must be carefully managed to ensure the transaction progresses smoothly. Professional conveyancing guidance helps ensure deadlines are met and the legal process is handled efficiently from reservation through to completion.

Whether you are purchasing your first share in a property or staircasing to increase your ownership, expert support is available to guide you through every step of the process. 

Request a Conveyancing Quote