When clients are restricted with being eligible for a standard mortgage due to 
affordability or deposit size there are still other options that may be available to them 
to get on to the property ladder. 
Shared Ownership 
One of these options is called shared ownership… 
Shared ownership involves buying a share in a property for example 25% and paying 
rent on the remaining 75%. This means there is a combination of legally owning 25% 
of the property and renting the remaining 75% of the property from a developer or 
local authority council. 
No matter what the percentage spilt is between legally owning and renting, you are 
responsible for 100% of the property maintenance. 
Most people are often given the opportunity to buy further shares in the property 
from the developer or local authority until they own the whole property outright. This 
is called ‘stair- casing’ which involves purchasing a minimum of 10% of the market 
value of the property at any given time. 
If you ever sell the property, the equity is spilt according to the percentage of 
ownership that each party holds. 
This option may be appropriate for people who are not yet able to save a larger 
deposit at the point of purchase and therefore this mortgage option will enable them 
time to save up to buy the rest of the property in minimum 10% chunks up till they 
own 100% of the property. 
Shared Equity 
A second option is called shared equity. 
Shared equity involves buying a property at a discounted price and the developer or 
local authority retain the remaining percentage also known as an equity share in the 
The person will legally own the whole property and arrange a standard mortgage on 
the property at an agreed discounted purchase price for example 80% of the 
property’s full market value. The scheme provider normally a developer or local 
authority will retain the remaining 20% equity share. 
The remaining 20% equity share is repayable either on the resale of the property or 
at the end of the mortgage term. This differs depending on each local authorities’ 
criteria. When it comes to shared equity there is no guarantee that a person will be 
able to increase their percentage stake in the property this is outlined via a solicitor 
during legal processes before buying the property. 
If you ever sell the property, the equity is spilt according to the percentage of 
ownership that each party holds at the market value at the time of the sale. 
This option may be most appropriate for people who are not able to purchase a 
property with a standard mortgage as a result of their reduced affordability. 
If you would like more information on both these mortgage options, please don’t 
hesitate to contact the team. 
CeMAP Mortgage Advisor: Rhys Evans 03/02/2023 
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