Shared ownership

With shared ownership you buy a share of a property and pay rent to the landlord on the rest. It can be a more accessible way to get onto the property ladder as you need a smaller deposit.

You can buy a home through shared ownership if you cannot afford all of the deposit and mortgage payments for a home that meets your needs.

How the scheme works

When you buy a home through shared ownership you:

• buy a share between 10% and 75% of the home’s full market value
• pay rent to the landlord for the share they own
• usually pay monthly ground rent and service charges, for example towards the maintenance of communal areas
• pay a buildings insurance contribution

You can buy more shares in your home in the future, until you own it in full. This is known as 'staircasing'. If you buy more shares, you’ll pay less rent. The amount of rent you pay will be based on the landlord’s share.

Example of shared ownership

For a £160,000 property, when purchasing a 25% share, you only need a mortgage to pay for the portion you're buying. 25% of £160,000 is £40,000.

We own the remaining 75% of the property and you pay rent on this. Rent is charged at 2.75% on the value of the remaining share.

You may also buy your share as a cash purchase. However, to remain eligible for shared ownership, you need to prove you cannot afford to buy on the open market without a help to buy scheme.

For 'resale' homes, the starting rent is set at the same level as the previous shared owner paid.

Selling your property

You can sell your property even if you have not staircased to owning 100%. The only restriction is you need to contact us and give us 4 weeks to sell the property before you can take it to open market.

Who can apply

You can buy a home through shared ownership if both of the following are true:

• your household income is £80,000 a year or less (£90,000 a year or less in London)
• you cannot afford all of the deposit and mortgage payments for a home that meets your needs

One of the following must also be true:

• you’re a first-time buyer
• you owned a home previously but cannot afford to buy one now
• you’re forming a new household, for example, after a relationship breakdown
• you’re an existing shared owner, and you want to move
• you own a home and want to move but cannot afford a new home that meets your needs
• for some homes you may have to show that you live in, work in, or have a connection to the area where you want to buy the home

If you already own a home

When you buy a shared ownership home, you must:

• have formally accepted an offer for the sale of your current home (called 'sold subject to contract' or 'STC')
• have written confirmation of the sale agreed (called a 'memorandum of sale') including the price and your intention to sell

You must complete the sale of your home on or before the date you complete buying the purchase of your shared ownership home.

Repairs and home improvements

You need to pay for repairs and maintenance no matter what share you own. Some costs might be covered by the building warranty or initial repair period. Check the 'key information document' for the home for more details. 

You need to have your boiler serviced every year by an engineer on the Gas Safe Register.

Home improvements, decoration and structural changes

You can paint, decorate and refurbish a shared ownership home. For example, you can replace a kitchen or bathroom. Your landlord is not responsible for this.

You need written permission to make changes. There are limitations; for example, you cannot sublet the property. Major or structural adaptations are not allowed. These restrictions should be outlined in your lease. Not all requests will be granted.

Changes to your home may increase or decrease its market value. This can affect the price if you buy shares of 5% or more in the future.

Homebuilders recommend not decorating new-build homes in the first year. This is because materials like timber and plaster need time to dry and settle.

External and structural repairs

The building warranty usually covers the cost of structural repairs in the first 10 or 12 years for new-build homes. There are different rules if your lease includes an initial repair period.

If you buy a home through a shared ownership resale, any remaining period on the building warranty will transfer to you.

Costs of purchasing a home

In addition to a deposit, there are other costs of purchasing a home:

• we charge a non-refundable reservation fee of £500 to reserve the property you wish to purchase; this is deducted from the sale price on completion
• some lenders charge you an administration fee for mortgage arrangement – lenders also require a valuation fee and will arrange this for you (these costs vary between lenders)
• you need to instruct a solicitor to act on your behalf (the solicitor will give you an estimate of the legal fees you will have to pay) – this will include their fee, stamp duty (if applicable), land registry fees and other related costs
• the general costs of living in the home such as utility bills and council tax will be the responsibility of the Shared Owner; some properties may also have a service charge, which will be outlined in the property lease

How to apply

Please contact the Shared Ownership Team at sharedownership@sheffield.gov.uk to register your interest in the scheme.

We'll add you to our mailing list and send an application form when properties become available.

What happens next

With your permission we'll send your contact details to Metro Finance. They will establish the percentage share you can afford. Metro Finance is our chosen financial advisor. They are specialists in shared ownership affordability and mortgage advice.

You're not obliged to take out any of the products they offer. If you seek mortgage advice from an advisor that is not Metro Finance, we'll decide if we can accept this.

Once your eligibility has been confirmed, affordability has been established, and you have a Decision in Principle or provide proof of funds for a cash purchase, applications will be dealt with on a first-come, first-served basis. The exception to this is for qualifying Armed Forces personnel and in certain rural locations and sites.

If your application is successful and a property is available, we'll contact you to arrange a viewing. We'll also issue the key information documents. At the viewing you can discuss the documents and ask questions.

If you decide to proceed, we'll provide details on paying the reservation fee and the expected completion times.