Leasehold and shared ownership
Shared ownership purchase
Buying a share of a home from a housing association and paying rent on the rest, under a shared ownership lease.
Every cost on its own line: the law firm's legal fee, VAT, the searches and other third-party costs, and any property tax. Your quote opens as soon as you send the form.
Ask for the key information document early. It summarises the rent, service charges, staircasing and resale rules, and your conveyancer checks it against the lease.
Shared ownership lets you buy a share of a home, usually between 25% and 75% and sometimes as little as 10%, and pay rent to the landlord, normally a housing association, on the share you do not own. You can often buy more shares later, which is called staircasing. Every shared ownership home is leasehold, so you take on a lease with its own rules on rent, repairs and selling.
This service is for buying a shared ownership home, whether it is newly built or a resale. The housing association has to approve you as a buyer, and only some lenders offer shared ownership mortgages. You can read more in our shared ownership guide.
Your instant quote includes the shared ownership and leasehold admin fees. If you go ahead, Keyfolio introduces you to a regulated law firm that knows how housing associations and shared ownership lenders work.
What is involved
Alongside the usual purchase steps, your conveyancer deals with the shared ownership features:
- Housing association approval: confirming you have been approved and that the share and price match the offer.
- The lease: checking the share you are buying, the rent on the remaining share and how it rises, service charges, repair obligations and the rules on staircasing and selling.
- Key information document: comparing the housing association's summary of costs and rules with the lease itself.
- Mortgage: checking the offer is for a shared ownership purchase and that the lease meets your lender's requirements.
- Property tax: explaining whether to pay Stamp Duty Land Tax on the share you are buying or to make a market value election and pay once on the full value.
- Report and exchange: explaining the lease, the costs and the tax choice before you sign.
- Completion: sending the price of your share to the housing association and paying the first rent and service charge.
- After completion: dealing with any stamp duty return and sending the new lease to HM Land Registry so you are registered as leaseholder.
What the legal fee covers
- Checking the housing association's offer and your approval
- Reviewing the shared ownership lease and key information document
- Explaining rent, service charges and how they can increase
- Explaining the staircasing and resale rules in the lease
- Advising on the property tax choice and filing any return
- Confirming the lease meets your lender's requirements
- Ordering and reviewing searches
- Completing the purchase and registering the lease
Costs you may see on top
- The shared ownership admin fee for the lease and the landlord's requirements
- The leasehold admin fee and any fees charged by the landlord or managing agent
- Searches and HM Land Registry fees
- A fee for acting for your mortgage lender
- Your first payment of rent and service charge, due on completion
- Stamp Duty Land Tax, depending on the option chosen and the price
- Identity checks for each buyer and the bank charge for sending money
What to have ready
- The housing association's offer letter or memorandum of sale, showing the share and price
- The key information document for the home
- Your shared ownership mortgage offer
- Evidence of your deposit and savings
- Photo identification and proof of address for each buyer
- Details of any home you own or have owned, which the housing association will ask about
How long it takes
A shared ownership purchase commonly takes 12 to 20 weeks from instruction to completion, the same range as other leasehold purchases. Housing associations often set their own deadlines, especially on new homes, and may expect exchange within weeks of approving you. Delays tend to come from waiting for the housing association's documents, the small number of lenders offering shared ownership mortgages, or the build timetable on a new development. Having your approval, mortgage offer and deposit ready early helps.
Things to watch for
- You are usually responsible for repairs and maintenance however small your share. Some newer leases include an initial repair period, usually 10 years for new homes, when the landlord covers certain essential repairs.
- Rent on the landlord's share normally rises every year under a formula in the lease. Check the formula and work out what the rent could be in a few years' time.
- Read the resale rules. When you sell, the landlord usually has a set period to find a buyer first, and the price is based on an independent valuation.
- Service charges are payable on top of rent and can rise, particularly in blocks of flats. Ask for the current budget and details of any planned works.
- The stamp duty choice is made when you buy. Paying on the full value now means no more tax when you staircase; paying in stages can mean another payment once your share goes above 80%.
Questions people ask
Who can buy a shared ownership home?
In England, your household income usually needs to be £80,000 a year or less, or £90,000 or less in London, and you must be unable to afford a suitable home on the open market. You also normally need to be a first-time buyer, a former owner who cannot afford to buy now, or forming a new household, with some exceptions for existing owners who are selling. The full rules are on GOV.UK.
How does stamp duty work on shared ownership?
You can choose. Either you pay Stamp Duty Land Tax once on the full market value of the home, which is called a market value election, or you pay on the share you are buying now and nothing more until your share goes above 80%. Which is better depends on the price, whether any relief applies and how likely you are to staircase. Your conveyancer will explain the figures before you decide.
Can I buy more shares later?
Usually yes, through staircasing, and each extra share reduces the rent you pay. The lease sets the rules, including the smallest share you can buy at a time and any limit on how much you can own, so your conveyancer explains them before you commit. The process itself, from valuation to completion, is described on our shared ownership staircasing page.
Can I rent out a shared ownership home?
Generally not while you own less than 100%, unless the landlord gives permission, which is usually limited to particular circumstances. Subletting without permission can breach both the lease and your mortgage. If your plans might change, ask your conveyancer to explain the subletting rules before you buy.
Who does the work
Your matter is handled by a law firm regulated by the Solicitors Regulation Authority, the Council for Licensed Conveyancers or CILEx Regulation, or in Northern Ireland by a solicitor regulated by the Law Society of Northern Ireland. At the moment the law firms on our panel act for property in England and Wales, so for property in Northern Ireland we tell you whether a firm can act for you before we pass your details to anyone. The firm confirms who will work on your file, their experience and its terms before you instruct it. How we choose our firms.
Helpful guides
The other costs of your move
- Stamp duty calculator: stamp duty in England and Northern Ireland, Land Transaction Tax in Wales
- Moving costs calculator: the other costs of the move, from the survey to removals