Shared Ownership

Buying a Piece of the Pie

Shared ownership is a housing model designed to be an intermediate step between renting and full ownership. Under this model, a buyer purchases a share of a property—for example, 60%—using a conventional mortgage. The remaining 40% share continues to be owned by a housing provider, typically a housing corporation or property developer. The buyer then pays a mortgage on their owned share and a monthly rent to the housing provider on the share they do not own. Over time, the buyer may have the option to purchase additional shares in the property, a process known as 'staircasing', with the ultimate goal of achieving full ownership. This model lowers the initial capital and mortgage amount required, making it more accessible for people with lower incomes.

The Koopgarant Experiment

This model has been implemented in the Netherlands in the past, most notably under the name Koopgarant. This scheme was used by housing corporations to sell some of their social housing stock to tenants or other starters. However, it has become much less common and is not a widespread feature of the current market. From a skeptical perspective, the model has significant drawbacks. The combined monthly cost of the mortgage and the rent can be almost as high as renting a comparable property on the open market. The resale conditions are often highly restrictive; typically, the owner is required to sell the property back to the original housing corporation, which limits their access to the open market. The corporation also shares in any profit upon resale. While it provides a form of tenure security, it offers limited autonomy and financial upside compared to full ownership, creating a complex and potentially restrictive form of co-ownership.