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As a middle ground between renting and buying, Shared Ownership has helped many people on low income onto the property ladder. Here, you'll learn which lenders offer mortgages through the scheme and how to choose the right one.
Do all lenders offer Shared Ownership mortgages?
No. Only around half of UK lenders offer Shared Ownership mortgages and some of the biggest financial brands, including NatWest and Clydesdale Bank, do not support the scheme. Other lenders you won’t be able to use include Aldermore, Metro Bank and Precise.
The good news, however, is that there is a good variety of lenders who do offer mortgages through Shared Ownership. Most high street banks will consider applicants who are using the scheme, and there are specialist lenders available too, for those with complex needs.
Our mortgage advisers specialise in Shared Ownership and have working relationships with the lenders who can help with it, which often means exclusive deals for our customers.
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Who are the best Shared Ownership mortgage lenders?
The best lender for you will depend on your needs and circumstances as many cater for specific needs. For example, there are lenders for Shared Ownership applicants with bad credit, ones who specialise in those who are self-employed, and everything in between.
Below you will find a rundown of some of the best lenders for Shared Ownership mortgages:
1. Halifax
Halifax are one of the mainstream lenders who offer Shared Ownership mortgages. They will only approve you for a home loan through the scheme if the share of the property you’re buying is between 20% and 85% if it’s a new build, or 25-85% for older properties.
They offer a loan-to-value (LTV) ratio of 95% for the share of the property you’re buying, but will cap this at 80% if it’s a new build conversion or renovation. They will base affordability on 4.49 times the applicant’s income for Shared Ownership.
2. Santander
High street lender Santander are another mainstream bank that offers mortgages for applicants who are using the Shared Ownership scheme. The percentage of the property you can own is flexible, with the lender simply stating that “less than 100%” is acceptable, but borrowers need to put down at least 10% of that share’s value as a deposit.
Santander will only lend to a Shared Ownership applicant if the housing association or local authority they will be co-owning with will allow staircasing up to 100%.
3. Kent Reliance
Kent Reliance are a specialist lender who offers Shared Ownership mortgages for applicants who don’t fit the criteria at high street lenders. They will consider mortgages covering 100% of the applicant’s share, which can be no more than 75% of the home’s value.
Other requirements at Kent Reliance include there being a mortgagee protection clause (MPC) in place and the applicant using an approved solicitor from the lender’s panel. They also insist that the property’s co-owner allows staircasing up to 100%.
4. Nationwide
High street lender Nationwide offers Shared Ownership mortgages and applies only a few lending caveats to applicants who are using the government scheme.
They have an LTV cap of 85% for new build houses and 75% for new build flats. The same LTV caps the lender uses for non-Shared Ownership mortgages apply to older properties.
5. Stafford Building Society
Stafford Building Society are among the regional building societies that support the scheme. They will lend to applicants who are buying up to 90% of a Shared Ownership home.
This lender is stringent with their affordability checks and factor in the mortgage, rent payments and any costs associated with the lease, as Shared Ownership properties are always leasehold and therefore subject to the standard lending criteria for this.
The building society will only consider additional borrowing requests from Shared Ownership applicants if they are for the purpose of staircasing to buy a larger stake in the property.
6. Barclays
As a mainstream lender, Barclays is well equipped to offer Shared Ownership mortgages to borrowers who don’t have particularly complex circumstances, such as severe bad credit.
They will lend to applicants who are purchasing at least 25% of a property through the scheme or up to 90% of one. Any percentage of the balance can come from their deposit.
Barclays places no restrictions on the resale of the property, except when the scheme provider has exercised the option to buy back the customer’s share of the property at the full market value for a maximum period of three months.
Lenders for borrowers with low deposits
Some Shared Ownership lenders are better than others at catering for borrowers with a low deposit, which would be classed as 95% or less of the value of the share you’re buying.
Below you will find examples of lenders who will allow 95-100% LTV on that share:
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Ecology Building Society: Will lend up to 95% LTV on the share you’re buying.
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Skipton Building Society: Will consider up to 100% LTV for the share the applicant will own but has more stringent criteria for this ratio.
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Halifax: Will lend up to a maximum LTV of 95% (based on the percentage of the property the applicant will own) but has a lower LTV cap for new builds.
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Principality Building Society: Will lend up to 95% LTV on Shared Ownership houses but has a lower cap of 90% for flats (based on the applicant’s stake).
For a complete rundown of every lender available, speak to one of our brokers.
Lenders for borrowers with bad credit
For borrowers with bad credit, there are specialist lenders who offer mortgages through the Shared Ownership scheme, usually with higher rates and deposit requirements attached.
These lenders include, but are not limited to, the following:
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Pepper Money: Offers Shared Ownership mortgages up to 75% LTV and 95% Loan to Share Value.
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Kent Reliance: Will offer Shared Ownership mortgages with a maximum loan cap of £1,000,000 and a minimum property value of £125,000. You must be buying at least a 10% share in the property to use them, and a maximum share of 75%.
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Kensington Mortgages: A well-known bad credit mortgage lender who accepts Shared Ownership applications with no specific caveats.
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The Mortgage Lender: Will lend on Shared Ownership properties in England and Wales with an EPC rating of A-C.
See our guide to getting a Shared Ownership mortgage with bad credit for more information.
How to choose the right Shared Ownership mortgage lender
There are plenty of lenders available for Shared Ownership mortgages, and it’s even possible to find one with bad credit or a low deposit, but how do you find the right one?
That’s where we come in. We are a team of whole-of-market brokers who have deep working relationships with Shared Ownership mortgage lenders, which means we know exactly what they offer and can often secure exclusive deals from them.
Our brokers will search the market for you to ensure you’re matched with the ideal lender for your needs - get started here to book a free, no-obligation chat about your options and requirements, or compare the latest rates yourself here.
FAQs
All Shared Ownership lenders will allow eligible property owners to increase their stake in their home through staircasing, should it be available. You might, however, encounter restrictions from the scheme’s provider as some Shared Ownership properties cannot be purchased up to 100% as they are earmarked to be retained for future scheme users.
This is known as a ‘restricted staircasing’ clause and some mortgage providers will avoid offering finance for properties that have one in place.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.