Shared Ownership FAQs
If you have a case in mind, but want to find out more, we’ve answered some frequently asked questions about our Shared Ownership mortgages below. You can find out more about our range of products on our Shared Ownership product page or about criteria on our Shared Ownership criteria page
Last updated 9 August 2022.
What is Shared Ownership?
Shared Ownership is a part of the Government’s affordable housing initiative which gives buyers the option to purchase a share of a new home (between 25% (10% for model leases 2021-2026) and 75%) from a housing association, paying rent on the remaining share they don’t have ownership of.
Also referred to as ‘part buy – part rent’, the scheme could be suitable for those who want to buy a home but can’t make up the full deposit.
Who can buy a home with Shared Ownership?
Clients can buy a home with Shared Ownership if their household earns £80,000 a year or less (£90,000 a year or less in London) and any of the following apply:
- They are a first-time buyer and unable to find a suitable home on the open market;
- They used to own a home, but cannot afford to buy one now;
- They are an existing shared owner.
For more information about our criteria, please visit our Shared Ownership criteria page.
How can my client purchase a Shared Ownership property?
The buying process for Shared Ownership properties is largely the same as purchasing any other property, with just a few differences.
Your client would view the property, and if it was right for them, take the next step in securing it which involves a financial assessment using a calculator which is maintained by Homes England.
The calculator takes into account lots of different factors that will give them an indication of what share size they will be expected to buy, and the percentage which they will pay rent on.
Once your client has been given this information, the next step is to find a mortgage and instruct a solicitor.
Can my client buy more shares of their home?
Your client can buy more shares of their home once they become the owner. This is called ‘staircasing’. Additional shares are normally available in minimum increments of 10% (5% for model leases 2021-2026).
The property will need to be valued using an RICS valuation to determine the cost of the new share. Please note, an RICS Valuation Fee will be applicable each time your client wants to buy new shares.
When the valuation has been confirmed, your client will need to pay for the additional shares. This can be done by a further advance on their current mortgage, or by remortgaging with additional borrowing.
What happens when my client wants to sell their home?
Unless your client owns all the shares in their home, the housing association will usually have the right to buy the shares from them. This is known as ‘first refusal’. The housing association also has the right to find a buyer for their home.
If the housing association doesn’t exercise their right to ‘first refusal’, or doesn’t have a buyer for the home, the buyer can advertise the property through an estate agent. They are able to sell the property for the share they own, which will be bought by a new owner on a Shared Ownership basis.
If the buyer owns 100% of their home, they can sell it with no restrictions from the housing association.
How can my client apply for a Marsden Shared Ownership mortgage?
Once your client has found a Shared Ownership property and has been given an indication of the shares they’re expected to buy, they can reach out to a mortgage adviser.
If you’d like to submit an Agreement in Principle and application on behalf of your client, we’ve covered the steps on our ‘Apply’ page, so you know what to expect.
You can find our range of available products on our product portfolio, available to download on our Shared Ownership product page.
What is the maximum loan size available for a Shared Ownership mortgage?
We’ll lend between 25% and 75% LTV of the equity share (up to 95% LTV of the market price) to those looking to purchase a Shared Ownership property on a repayment only basis.
Currently, the maximum property value for our Shared Ownership mortgage is £500,000, so we’ll lend up to a maximum of £375,000. We require a minimum loan size of £30,000.
For further product details, please visit our Shared Ownership product page.
What is the minimum deposit my client will need when applying for a Shared Ownership mortgage?
We lend up to 95% LTV so your client will need to provide a minimum 5% deposit. The deposit can be the applicants’ own or gifted from an immediate family member (spouse, parent, grandparent, sibling, child or grandchild). Evidence of the source of deposit is required.
Is there a minimum income my client must earn to apply for a Shared Ownership mortgage?
We require a minimum income requirement of £17,500 per Shared Ownership mortgage application. We also have a maximum joint income of £80,000 (London = £90,000).
What is the minimum property value?
The minimum property value is £100,000 or product dependent. We also have a maximum property value of £500,000.
Can my client remortgage their existing property and raise additional borrowing?
We will consider remortgage applications. Please visit our Shared Ownership criteria page for details regarding our additional borrowing restrictions.
What age can my client take out a Shared Ownership mortgage?
The minimum age for a Shared Ownership mortgage is 21. The loan must be repaid before your client’s state retirement age or their stated intended retirement age, whichever is lower. Further details regarding your client’s state retirement age can be found on our Shared Ownership criteria page.
What documentation does my client need to provide?
You can download a copy of our documentation checklist from our ‘Downloads’ page which lists all the requirements for Shared Ownership mortgage applications.
Is there an affordability calculator for Shared Ownership mortgages?
Yes, if you’d like to check your client’s affordability for a Shared Ownership mortgage, please use our Residential calculator which can be downloaded on our ‘Affordability calculators’ page.
Can I submit intermediary mortgage applications online?
Yes, you can submit an application using Intermediary Online.
You’ll need to register to use the platform, but you’ll be able to create and edit applications, upload documentation and receive notifications at each stage of the process.
Can I download intermediary application forms?
Yes, you can download our mortgage application forms on our ‘Downloads‘ page; however, if possible we would prefer you to submit your application online.
We can accept applications and supporting documents via email in the first instance at email@example.com but the original application form will need to be posted to our Principal Office address; Marsden Building Society, Principal Office, 6-20 Russell Street, Nelson, Lancashire BB9 7NJ.
Do I need to register to submit an intermediary mortgage application?
No, there is no need to pre-register if you’re applying via paper application, we will use the information provided when you submit your first application with us.
If you want to submit your application online, you will need to register for our Intermediary Online service.