One way to get on the ladder What is shared ownership and how does it work?

A generation ago no young professional — let alone a young professional couple — would have seen shared ownership as the only way to get on the property ladder.

However, vast numbers of successful twenty- and thirty-somethings today find themselves in the frustrating situation of being unable to buy a home outright.

Latest Halifax research shows an average London first-time buyer must spend more than £410,000 on their starter home, and find a deposit of £100,000-plus. So shared ownership is perhaps the only option for young Londoners who don’t have family in a position to give them a six-figure leg up.

If you’re considering the shared ownership route, here’s our guide:

Am I eligible for shared ownership?

Yes, geographically speaking, if you live or work in a London borough. Most schemes give top priority to those with a local link.

Fantastic. I work in Westminster. Does that mean I can buy a flat there?

Only if you’re extremely lucky. Some boroughs have very limited sites for the kind of large developments that include shared-ownership homes, and this applies to great swathes of Zones 1 and 2. Also, in areas where prices for one-bedroom flats top £600,000, even the tiniest share of one is not going to be affordable, so they tend to be offered for subsidised rent rather than shared ownership.

So where can I buy?

In the last year, shared-ownership flats have come up across the capital from Brixton to West Hampstead. But Docklands, Canary Wharf or major regeneration zones, where thousands of new homes are being built and most developers are including substantial proportions of affordable homes in the mix, are a much more likely option.

But I don’t live or work in those areas…

Changing jobs to give yourself the best chance of finding a shared-ownership home seems radical — but renting in an area where a lot of building is going on will increase your chances. The system is changing slowly, but most developments still give local priority.

I’ve got a decent job. Do I earn too much for affordable housing?

The upper limit for people buying a shared-ownership flat is £90,000 per household. This means a singleton can earn up to £90,000 but if a couple are buying, their combined salaries must not top £90,000.

Do I earn too little?

There’s no set minimum income requirement to become a shared owner. Usually people with a household income of between £35,000 and £50,000 will be OK.

So how much will it cost?

Monthly costs vary but as a rule of thumb, most one-bedroom flats tend to cost about £1,000 to £1,400 a month to run, while two-bedroom flats are about £1,800 to £2,200.

What about raising a deposit?

If you were buying a 25 per cent share of a flat with a full value of £400,000 your share would cost £100,000. A 10 per cent deposit would be £10,000 — as opposed to £40,000 if you were buying on the open market. You also only pay stamp duty on the proportion of the property you are buying.