A guide to securing a shared ownership mortgage

Shared ownership schemes are designed to help buyers who do not earn enough money or have a large enough deposit to purchase a property outright. 

With house and flat prices in London and the surrounding counties consistently rising, the government has stepped in and promised more affordable housing to help working professionals remain in London.

How does it work?

You are able to secure a property for as little as 25% of the purchase price. 

The properties available to you are usually new build, or existing properties which are being remarketed due to the existing homeowners selling their share (which we call re-sales). 

While you can apply for a mortgage for the 25% share, you will be required to pay rent on the unsold share, as well as paying a service charge each month. The rent and service charge that you will need to pay is set by the Housing Association.  

Richard Forgione, a shared ownership expert at Trinity Financial, says: “The concept of affordability is key when it comes to shared ownership as the Housing Association will typically require a pre-financial check to ensure that the property you are interested in is affordable to you. 

“All Housing Associations need to comply with the Homes and Communities Agency (HCA) guidelines, so it is important that you speak to a qualified mortgage adviser who understands this area.”

How much deposit do I need?

You can apply with as little as a 5% deposit.  However, this may limit the amount of mortgage lenders available to you.

How do I start looking for shared ownership properties?

Speak to the housing team in your local council, or housing association, to see whether shared ownerships is available in your area and whether you are eligible to apply. 

Is there a maximum income to qualify for shared ownership?

The typical maximum gross income of £71,000 for those seeking a one or two bedroom home; and potentially up to £85,000 for those seeking a home with three or more bedrooms. 

Outside of London, the maximum annual income for those looking to buy a home through shared ownership is £60,000.

What will the lenders want to know about?

Your credit score: If you have a smaller deposit, your credit rating is imperative to obtaining a mortgage. If you have not had any credit cards or loans you may have a lower credit score. 

Electoral Role: You will need to provide evidence of where you have been living for at least the last three years.

If you are renting, it is important that you have some form of banking or credit commitments registered at your address. Some lenders may require at least two forms of your original address confirmation.

Affordability: The Homes and Communities Agency provide guidelines to assess how much you can borrow. You may find you can borrow more money through a mortgage lender, but it still has to comply with the HCA.

Deposit: You will need to have the deposit available to you at the time of applying and you will be asked for evidence to show how your savings of deposit has been generated.

Additional costs: You are likely to require an additional £3,000 - £4,000 for fees to pay your solicitor fees and stamp duty if it is applicable. Plus any survey and mortgage broker fees.

For a financial assessment to find out if you qualify for a shared ownership mortgage, call Trinity on 020 7016 090. 

Please ask for our specialist Richard Forgione.