Maggie Walsh quizzes Sophie Dalton, Marketing Manager at Square Roots, on taking an alternative route to owning a home...
Q: How does Shared Ownership work, and what makes it different from buying a home outright?
Shared Ownership enables buyers to purchase a percentage of a home rather than the entire property, which is typically a 25% share. Instead of stretching finances to secure a full mortgage, buyers only take out a mortgage on the share they’re purchasing and pay a subsidised rent on the remainder. It’s designed to create an accessible stepping-stone into homeownership, especially for those who can afford monthly repayments but struggle with large deposits. Unlike buying outright, ownership grows gradually and flexibly over time.
Q: What are the main benefits for buyers choosing Shared Ownership?
The main attraction lies in affordability. Deposits are dramatically lower because they’re based solely on the share purchased, not the full value of the home. Monthly costs can also be more manageable, particularly compared with renting privately. Shared Ownership offers the security and stability of being a homeowner while giving buyers the freedom to increase their stake as their circumstances improve. It’s a long-term pathway rather than an all-or-nothing commitment.
Square Roots Kingston
Q: Are there any disadvantages or restrictions buyers should be aware of before choosing Shared Ownership, such as resale rules, rent increases, ground rent fees or limitations on property modifications?
Shared Ownership comes with important conditions buyers must factor in. Rent is paid on the share not owned and can rise over time. The homes are typically leasehold, meaning alterations, especially structural changes, often require permission. When selling, you must first offer your share back through the housing provider for a set period before going to the open market. Service charges, ground rent and maintenance obligations also continue to apply. These aren’t necessarily drawbacks, but they’re essential for buyers to understand upfront.
Q: What is ‘staircasing’ within the Shared Ownership model?
Staircasing is the process of buying more shares in your home over time. It can be done gradually, even by as little as 1% a year in some cases, or in larger chunks. Once you staircase to 100%, you become the full owner and stop paying rent, although some costs like service charges may remain.
Square Roots Kingston
Q: Are buyers able to staircase in small increments, or are there minimum percentage increases? Are there any fees involved in the staircasing process?
Depending on the scheme and lease, buyers may staircase in traditional larger chunks, such as 10% or more, or in some cases as little as 1% at a time. While this creates significant flexibility, each staircasing stage usually incurs costs, including a valuation to confirm the current market price, legal fees, and potential mortgage arrangement fees. It’s a flexible system, but one that requires budgeting for these administrative steps.
Q: Could a buyer potentially be disadvantaged if they staircase their way to buy the house back in full?
If property values rise substantially, buyers looking to staircase to 100% must purchase the remaining share at the updated market rate. Each staircasing event also comes with valuation and legal fees. For some, it may have been cheaper to buy outright if financially possible from the start, but Shared Ownership is designed precisely for those who cannot make that leap early on.
Square Roots Kingston
Q: Beyond the purchase price, what other costs should buyers anticipate, like rent on the unsold share, service charges, ground rent, valuation fees, legal fees, or ongoing maintenance responsibilities?
Beyond the initial deposit and mortgage payments, buyers pay rent on the share they don’t own, plus service charges and ground rent, which contribute to communal maintenance. These charges can vary and sometimes increase annually. Buyers are responsible for internal repairs and maintenance to their own home.
Staircasing may incur valuation and legal fees, and lease extensions can involve additional costs.
Q: What is the minimum deposit required, and is it calculated on the full market value or only on the share being purchased?
Deposits for Shared Ownership are generally much lower than for traditional purchases because they apply only to the share being bought. This typically starts from 5% of the share purchased, which enables the deposit to become significantly more manageable, compared to paying a deposit on the full market value of the home.
Square Roots Kingston
Q: Do lenders allow 100% mortgages on the share being purchased, or is the buyer required to contribute some of their own savings as a deposit?
Buyers are required to contribute a deposit, as mortgage lenders require buyers to demonstrate financial responsibility and reduce risk by contributing towards the purchase.
Q: Is there anything different about applying for a Shared Ownership mortgage?
The process is similar to a standard mortgage, but not all lenders offer Shared Ownership products. This is why many buyers work with a specialist broker or advisor who understands the market. These professionals help match buyers with lenders experienced in Shared Ownership, ensuring the mortgage aligns with income, deposit size and long-term goals.
Q: What financial or eligibility criteria must buyers meet to qualify for Shared Ownership?
Eligibility typically includes being at least 18, having a household income within specified limits, not owning another property (unless selling), and demonstrating good credit and the ability to afford monthly costs. These criteria are broadly standard across the Shared Ownership sector, ensuring the scheme supports those who genuinely need help onto the property ladder.
Square Roots Kingston
Q: How does the resale process work if a buyer owns only a share of the property? Does Square Roots have a first refusal?
When selling a Shared Ownership home, the housing provider is usually given a period of first refusal to find a new buyer. This helps ensure the property remains accessible to those who meet the eligibility criteria. If no suitable buyer is found within that timeframe, the owner is then free to market their share more broadly, often through an estate agent.
Q: When selling does the owner of the property have to sell through Square Roots or can they go to a high street agent?
Initially, the sale goes through Square Roots during their nomination period. If this window passes without a buyer being secured, the seller may list the property with a high street agent or sell on the open market, subject to the rules of their lease.
Q: Can buyers really purchase a Shared Ownership home with as little as a £5,000 deposit?
Yes, Shared Ownership homes are available with a deposit as low as £5,000, depending on the share you buy. The deposit is typically just 5% of the share price, which typically starts from a 25% share, not the full property value, so for example, a 25% share of a £400,000 home would require a 25% mortgage of £100,000 with a 5% deposit of £5,000.
Q: Can buyers use the 'Bank of Mum and Dad' to help me get a bigger deposit?
Yes, buyers can receive financial help from family members to increase their deposit. Many buyers use gifted deposits from parents or other relatives, which must be properly documented for mortgage purposes.
Q: Is it possible to move into a Shared Ownership property if buyers have children?
Shared Ownership is open to individuals, couples, and families with children. Square Roots offers a wide range of family-friendly developments with spacious homes and affordable options.
Q: Are buyers able to make the place their own with painting and decorating?
Yes, buyers are free to decorate and make minor cosmetic changes like painting, putting up shelves, or changing light fittings. For major work, such as structural changes, permission is required from the housing association and potentially planning approval.
Q: I am a leaseholder rather than a freeholder if I buy with Shared Ownership?
Yes, Shared Ownership makes you a leaseholder, owning the leasehold interest for a specified term (often 99 or 125 years). The freeholder (housing association) owns the land and building structure, which is why you pay rent on the share you don’t own. Understanding leasehold terms is important before committing.
Q: Do I have to have the property for a certain period of time before I can sell?
Typically, you must live in the property as your main home for a minimum period, often around five years, though this varies. When selling, you usually offer your share back to the housing association first, which often has the right of first refusal to buy your share before you can sell on the open market. This keeps properties affordable for future buyers.
Q: Is it true that pets aren't always permitted?
Pets are allowed in many Shared Ownership properties, but some have restrictions. This is due to the lease and management rules, which often prohibit pets in flats or managed developments due to communal living considerations. At Square Roots, residents are required to complete a Pet Licence to allow them to welcome their beloved pets to their new home.
Current Square Roots Developments in Surrey
Square Roots Kingston KT1 is located on Hawkes Road in Kingston, perfectly located within easy access of the extensive array of cultural attractions, entertainment, leisure, shopping, transport and educational amenities available in this highly sought-after location.
With apartment buildings up to 12 storeys, this stylish collection includes 125 one, two and three bedroom apartments all available through Shared Ownership. Complete with open plan kitchen/dining/living areas, spacious bedrooms and a high specification throughout, each property has a private balcony or terrace, with many homes offering impressive views across Kingston and South-West London.
With its stunning riverside scenery, vibrant shopping and dining scene, alongside abundant leisure facilities, Kingston is a thriving community just a 14-minute stroll from the development. With Norbiton train station just an 11-minute walk away, London Waterloo is less than half an hour away, and the bright lights and bars of Clapham Junction are only 18 minutes away.
Homes are available from £98,750 for a 24% share of a one bedroom apartments with a full market value of £395,000, requiring a 5% deposit of £4,937.
