Phil Spencer answers five key questions for anyone considering shared ownership

Ever thought about getting on the ladder through shared ownership? (Picture: Getty/Shutterstock) According to the latest ONS figures, the average home in the UK now costs an eye-watering £293,000. And with the cost of renting so high, many young people, who might otherwise have been homeowners, simply can’t afford to top up their savings pot. Against that backdrop, shared ownership offers an alternative route into homeownership, allowing wannabe homeowners to pay down a smaller deposit to own a share of a home, and pay rent on the rest. Ever wondered how it all works? Metro spoke to Phil Spencer, TV property expert and founder of the property advice website Move iQ, to get the lowdown. Here, he answers the burning questions about shared ownership you need answering, before taking the plunge. Shared ownership poses an accessible route into homeownership (Picture: Getty Images) Ready to start your homebuying journey? You can access completely fee-free mortgage advice with London & Country (L&C) Mortgages, a partner of Metro. Customers benefit from: – Award winning service from the UK’s leading mortgage broker – Expert advisors on hand 7 days a week – Access to 1000s of mortgage deals from across the market Unlike many mortgage brokers, L&C won’t charge you a fee for their advice. Find out how much you could borrow online Mortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage. Can you sublet? For those renters who are contractually allowed, subletting allows them to keep their lease, but have someone else cover the rent for a bit. However, not all tenancy agreements permit it, and this kind of arrangement needs to be thoroughly checked with the landlord first. Even with shared ownership, you need to be careful. Ask Metro Use AI to go deeper into the stories you care about – powered by Metro and trusted publications. Phil says that, generally speaking, subletting isn’t allowed under the standard terms of most shared ownership leases. He tells Metro: ‘It’s unlikely to be permitted unless you own 100% of your share or get permission from the housing association. ‘Shared ownership is designed to help people own and occupy their home, not be a back door route to buy-to-let, so housing associations take this seriously.’ That said, there are sometimes exceptions, including leases which allow short-term subletting under very specific circumstances, including the owner needing to relocate temporarily for work. You’ll need written permission from your housing association first, and this isn’t a given. Get on the ladder with shared ownership Shared ownership mortgage schemes allow you to buy a portion of your property, while still paying rent to a landlord, local council or housing association. In some cases, this means saving up for a deposit of just 5% of your share of the home. Shared ownership allows first-time and other buyers to purchase a share in a leasehold property. They take out a mortgage on the share they buy and pay rent on the balance, usually to a housing association. It’s the most affordable way to get or stay on the housing ladder if you don’t earn enough or have sufficient savings to buy on the open market. Both the mortgage and deposit are much smaller: the deposit’s typically 5 to 10% of the share you’re buying and the rent’s subsidised. Monthly mortgage and rent combined work out cheaper than a mortgage alone would. Looking for some options? Try Hyde, L&Q, NHG Homes and SO Resi (Thames Valley Housing). For more information, pick up a copy of Metro on September 22 to read our shared ownership guide. Can you get a lodger? As housemates go, renter-owners looking for a bit of company (and, crucially, help covering the mortgage) might get in a lodger. Phil says it depends on the lease, as while some shared ownership agreements might permit a lodger, others won’t. If you’re considering it, he suggests reading your lease carefully and contacting your housing association if you’ve got any doubts. Phil says: ‘What’s important to understand is that even where a lodger is allowed, you remain the occupier. ‘Shared ownership does not give you the same freedoms as outright ownership, and your lease sets out exactly what you can and can’t do. ‘Always get the housing association’s answer in writing to avoid any doubt or disagreement down the line.’ What is staircasing? With shared ownership, it’s possible to staircase up (Picture: Getty Images) If you’ve read up about shared ownership, you’ve probably heard of staircasing, which is the process of buying a larger share of your home over time. When you first sign on the dotted line, you’re probably buying between 25 and 75% of the home. But as you start to pay off the mortgage on that, you might start to think about buying additional shares (increasing by 10% each time), so you can get closer to the goal of total homeownership. Phil explains: ‘Each time you staircase, you’ll need a new valuation of the property and you’ll incur solicitor’s fees. ‘If property values have risen since you first bought, the shares you’re buying could cost more than they did earlier. ‘Stamp duty may also be a factor, depending on the value of your cumulative share. ‘None of this makes staircasing a bad idea, as reaching full ownership is a genuinely positive goal; but you should always go into shared ownership with your eyes open about the true cost of the journey.’ The scheme allows people to buy a home with a smaller deposit (Picture: Getty Images) How do I sell up? When you first pick up the keys, you might not be thinking about the future. But at some point, you’ll consider selling up, so it’s worth knowing that doing so with shared ownership works slightly differently. Phil says you need to have an understanding of how this works from the very beginning, before you even buy. Crucially, it’s worth noting that if you’ve staircased, you’ll be selling this share of the property, meaning you need to find a buyer, who is not only interested in (and eligible for) shared ownership, but has the funds to purchase a higher percentage than the 25% you may have started with. When you do decide you want to sell a shared ownership property, you need to tell your housing association. Phil says they then have a ‘set period of time,’ always outlined in the original lease, when they can find a buyer themselves. This is known as a nomination period. ‘Usually this will be another eligible shared ownership buyer,’ he explains. ‘If they can’t find another buyer within that window, the property can then be listed on the open market. ‘You’ll need to commission an independent valuation, as the sale price must reflect the current open market value of the property. ‘Be aware that additional legal costs, for both your solicitor and, in some cases, the housing association, may be involved in the process.’ Is shared ownership the future of home ownership? With the property market as it is, many young people can’t afford to buy their own homes outright. And so, shared ownership is sometimes held up as the future of homeownership, a more affordable way onto the ladder. Phil reckons for the right person in the right combination of circumstances, shared ownership can be the right answer. However, as with anything, he recommends doing your research before committing. ‘The scheme gets people onto the property ladder in good locations with a smaller deposit than they’d need to buy outright, and with rent on their unowned share that is typically below open market levels,’ he says. ‘As part of a broader toolkit for first-time buyers, it has value. The key is to get proper advice before you proceed. 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