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What is a Shared Ownership Mortgage in Leeds?

The Shared Ownership Scheme stands as a government-initiated mortgage programme in the UK, designed to help individuals in taking their first steps onto the property ladder.

It caters to permanent UK residents falling into the category of either first-time buyers or previous homeowners struggling to acquire a new property.

In addition, your household income must not exceed £80,000, and the property you aim to purchase will predominantly be on a leasehold basis. Leasehold signifies that you’ll possess the property for a predetermined duration.

Through Shared Ownership in Leeds, you can secure your home through a combination of a mortgage and rental payments. The total of your rental payments will usually be lower than your mortgage payments.

What percentage of the property in Leeds can I purchase?

Initially, when Shared Ownership was introduced, the minimum share you could own was 25%. Now, this has been brought down to 10% for some properties.

Homeowners have the option to increase the percentage share they own through a process called staircasing. This is typically done at the point of remortgage or when the homeowners have paid off the mortgage on the share they own.

If you decide to increase your shares, you can now purchase them in 1% instalments, a change from the previous 5-10% increments.

Moreover, the charges for increasing your extra shares have been lowered. Additionally, your landlord will cover the maintenance and repair expenses for the first decade of ownership.

The rules governing your Shared Ownership in Leeds may vary depending on when you originally took out the mortgage. As a mortgage broker in Leeds, we recommend double-checking the rules of Shared Ownership to ensure compliance.

Feel free to drop a message to our mortgage advisors in Leeds if you are uncertain about how your property is affected.

How do I apply for a Shared Ownership mortgage in Leeds?

Qualifying for the Shared Ownership scheme in Leeds is the first step to access its benefits. The scheme is not universally applicable, so ensuring it aligns with your needs is important before applying.

To determine your eligibility for the Shared Ownership scheme in Leeds, reach out to an agent in the area you are looking to purchase.

Provide them with information such as your income, budget, location preferences, and credit history. Once eligibility is confirmed, the next step is to prepare your mortgage application.

Engaging a mortgage broker in Leeds, like us, is a wise move at this stage. Not every mortgage lender supports Shared Ownership mortgages, but a mortgage broker has access to thousands of deals through various lenders.

Pros & Cons of Shared Ownership in Leeds

Like every scheme, Shared Ownership in Leeds comes with its own set of advantages and disadvantages.

Pros of Shared Ownership

First time buyers in Leeds often grapple with the challenge of saving for a mortgage deposit. However, the Shared Ownership scheme typically demands a deposit only for the percentage of the property you own.

For instance, if you’re securing a mortgage for 20% of a £200,000 property (£40,000 mortgage) and are required to put down a 10% deposit, you’ll only need a £4,000 deposit.

Numerous mortgage lenders, including those on our panel, offer Shared Ownership mortgage products. This scheme has gained popularity in recent years, with first-time buyers choosing it to step onto the property ladder.

Shared Ownership Mortgages provide enduring stability as you become both an owner and occupant simultaneously. The opportunity to purchase your property in the future may be available, depending on your aspirations.

However, before opting for a Shared Ownership mortgage in Leeds, ensure this option aligns with your future plans, as some building societies may have restrictions. Your ability to purchase the property in the future will be outlined in your contract.

Secure tenure is a notable advantage, providing stability compared to the uncertainty of the private market. As long as you can meet your monthly mortgage payments, you can reside in your home for the duration of your lease, typically ranging from 99 to 125 years.

Cons of Shared Ownership

While there are numerous advantages to Shared Ownership, it’s essential to consider the drawbacks. You will be responsible for 100% of the ground rent and service charges for your property, regardless of the size of your purchased share.

As your home is co-owned, seeking approval from the relevant housing provider before making structural alterations is mandatory. This requirement may limit the sense of complete ownership freedom you’d typically expect.

Can I sell my home if I have a Shared Ownership Mortgage in Leeds?

If, after living in your Shared Ownership property in Leeds for a while, you decide to move, the process differs from most other mortgage types. Selling your home depends on the percentage of the property you own, typically requiring 100% ownership shares before selling.

It’s key to note that the housing association retains ‘first refusal’ rights for the initial 21 years after your home purchase. This grants them the opportunity to present a purchase offer before considering selling on the open market.

If you don’t own 100% of the property, your initial step is to try and purchase the remaining shares before selling.

Is a Shared Ownership Mortgage in Leeds right for me?

Shared Ownership may not suit everyone. As a mortgage broker in Leeds, we often find that sole applicants and those struggling to save for a deposit benefit the most from the scheme.

Qualifying for Shared Ownership in Leeds involves meeting specific criteria. To determine your eligibility, reach out to our mortgage advisors in Leeds, and we can assess your circumstances.

To connect with the team, either give us a call or book a free mortgage appointment online. We’re here to provide help and make your Shared Ownership process stress-free!

Date Last Edited: February 19, 2024

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