Frequently asked questions about shared ownership

But first, about the campaign...

Since the launch of our campaign, we have had lots of questions from various campaigners and advocates about our approach and our position on various housing policies relating to shared ownership. We want to answer these questions in detail so we have produced these FAQs. 

We have also produced FAQs for people who are new to shared ownership on and for housing associations interested in joining our campaign.

Important update

In responding to the coronavirus outbreak, the government has taken the unprecedented step of suspending the housing market, advising people not to buy, sell or move home. In light of this official advice, we’ve taken the decision to temporarily pause our shared ownership campaign promotion and advertising activity. We do recognise however that this crisis is a fast-changing situation, and we’ll be reviewing the decision to pause on a monthly basis.

Why is the NHF running this campaign?

Housing associations think that everyone should be able to live in a good quality home that they can afford. They are working together to make that happen. Part of this story is their offer of shared ownership to help people into homeownership. 

It is widely acknowledged that there is a lack of understanding about shared ownership. People are often confused by how it works. We believe that shared ownership is a great product for many people. However, it may not be right for everyone and there are some eligibility criteria. But for many it works and on average it is cheaper than renting privately in many parts of the country. It also helps people who would have no other way to become a homeowner. 

Our new campaign, with its bold creative, aims to cut through the noise and to start telling people what shared ownership is and what it isn’t. Then it's their choice. 

We also know the government is proposing some changes to the product. We are keen to work with the government to ensure any changes improve the experience for shared owners without reducing housing associations’ ability to build new homes or provide services to existing tenants and residents. We are working with our campaign supporters to look at what changes could also happen to improve the journey to becoming a shared owner and to see how we can make the process more transparent and meet the needs and expectations of customers today. 

Why are we promoting shared ownership and not social rent and other affordable products? 

As the trade body for housing associations, we campaign for more social rented homes. During the general election in December 2019 we called for the new government to end homelessness and boost social and economic opportunities for millions by committing to an ambitious £12.8bn-a-year housebuilding programme. Find out more

But we need more homes of all types to meet housing need. In 2018/19 housing associations built more than 14,000 new shared ownership homes – a 28% increase on the previous year. This represented over 6% of total housebuilding. Our research shows we need to build 25,000 shared ownership homes each year to meet housing need in this part of the market.

We also believe that the general public has a better understanding of social rented homes and who can and can’t apply for them. Social rented housing is mainly allocated by need through local councils, and this does not lend itself to a direct advertising campaign in the same way. 

Do housing associations just do this to make a profit?

Housing associations are not-for-profit providers of social and affordable housing and by nature don’t generate profits. Any additional funds they raise are reinvested into delivering their social purpose such as community services and regeneration, providing support to vulnerable people. 

3 questions about shared ownership 

1. Why do customers sometimes lose money when they decide to sell their share, having done lots of improvement and maintenance work to the property?

If a shared owner’s home increases in value over a number of years they will receive this additional equity if they sell their home. Making improvements may add to this value. However, house prices do fluctuate and so the value of the home may increase or decrease over time. It is best for shared owners to seek financial advice on any key decisions. 

2. How, if you are paying both a mortgage for a part of the property and rent for the rest, could anyone ever get themselves into the position to eventually buy the place outright? 

The greater the share a shared owner buys in their home, the less rent they will pay to their housing association. If they staircase to 100% they become an outright owner, and they will no longer need to pay rent. Ultimately the decision is for the shared owner to assess their own financial position in terms of buying more shares. 

Of the 320,000 shared ownership homes that housing associations managed last year, 42% had been fully purchased by their owners. However, this doesn't mean that everyone will be able to do it or will want to. Some homes have restrictions due to being in rural areas or places where the building of new homes is restricted. 

All of the details about the cost of this process is available in the lease. The housing association provides details on the costs and the shared owner’s solicitor can advise on the process. 

The government is currently reviewing the rules around staircasing with the ambition to help people staircase in smaller amounts.

3. Why are shared ownership customers responsible for paying for major structural works within their home?

Shared ownership properties are usually leasehold, meaning that shared owners are leaseholders. Being a leaseholder is one of the main ways to own a home. The lease makes the shared owner the homeowner and they are responsible for all the repairs and maintenance in their home including major structural works and major repairs. This is the case with all leasehold properties, where the sharing of cost is stipulated in the lease.

Who to speak to

Ella Cheney, Shared Ownership Programme Manager