Plans to make it easier to get onto the property ladder using shared ownership revealed – here’s how it works


HOME buyers will soon be able to get on the ladder by purchasing just 10% of the property under a shake-up to the shared ownership scheme.

Currently, homeowners must purchase a minimum 25% to get on the property ladder using the initiative.

The plans are part of a £12billion programme that will see around half of new homes built become available for affordable ownership under varying government help schemes, one of which is shared ownership.

Shared ownership lets buyers purchase a portion of the equity if they can’t afford to take out a mortgage for the total value of the property.

They will still need to put down a deposit and can take out a mortgage for the part that they own, while they pay rent to the housing association that owns the remaining portion.

Homeowners can then “staircase” – buy more shares in instalments – until they own 100% of the property.

The minimum amount you can staircase varies depending on what is outlined in the lease but is typically between 5% and 10%.

Under the new plans, the minimum shares that can be purchased when staircasing will be slashed to 1%.

It’s worth bearing in mind though that the portion you buy is worth a percentage of the current property value, so you’ll pay more if house prices go up.

You also have to pay legal fees and stamp duty tax – if applicable – every time you staircase, which could end up costing you more in the long run.

We previously spoke to a first-time buyer who ended up paying the tax three times after purchasing her shared ownership flat.

Revamping the scheme, which is open to all buyers who don’t own another property, is part of a wider plan to get Brits on the property ladder and boost the economy.

Housing Secretary Robert Jenrick said the rest of the programme of funding for England will go to social housing and other discounted rental homes.

But housing charity Shelter warned more funding was needed for “genuinely affordable” social homes in the face of the coronavirus crisis and Labour said the plans risk “further dwindling” the number of homes for social rent.

The Ministry of Housing set out the proportion of the funding, which was previously announced at the Budget, that would be targeted towards ownership.

The funding will be delivered over five years between 2021 and 2026 and is aimed at providing up to 180,000 new homes.

Mr Jenrick said: “Today’s announcement represents the highest single funding commitment to affordable housing in a decade and is part of our comprehensive plans to build back better.

“Thanks to the range of flexible ownership options being made available, more families across the country will be able to realise their dreams of owning their own home, with half of these homes being made available for ownership.”

The department said nearly £7.5billion in total would be delivered outside London by funding body Homes England.

A spokesman for London Mayor Sadiq Khan said £4.9billion was required by the capital yearly to build the homes it needs but it has only been offered £4billion for five years.

Shelter chief executive Polly Neate said: “With an unprecedented recession under way, major job losses on the horizon and a housing emergency about to spin out of control, the government must invest more in social housing than its current plans allow for.

“Social homes are designed to be genuinely affordable, which is exactly what we need right now. Discounted homeownership schemes are not.”

Shadow housing secretary Thangam Debbonaire called for the government to “get a grip” on affordable housing.

“This reheated announcement of an existing budget for affordable homes will fool nobody,” the Labour MP said.

The Local Government Association’s housing spokesman David Renard added: “With more than 1million households on council housing waiting lists, it is vital that we build more housing for social rent and we look forward to seeing more clarity around how this will be delivered.”


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