Releasing Equity from a Shared Ownership Home

If you own a shared ownership home and are over 55, you may be wondering whether you can tap into your property wealth the same way full homeowners can — and the answer is: possibly yes.

In fact, equity release could not only help you unlock tax-free cash, it might also allow you to take the final step and buy out the remaining share of your home, becoming a full owner in the process.

But as with any property finance decision, there are a few things to understand before moving forward. Let’s break it all down — from what shared ownership actually means, to how equity release could work for your situation.

Shared ownership is a government-backed housing scheme designed to help people buy a home who might not be able to afford one on the open market.

Rather than purchasing the entire property, you buy a percentage of it — usually between 25% and 75% — and pay rent on the rest to a housing association, council, or developer.

Over time, you may have the option to increase your ownership share through a process called staircasing. Once you own 100% of your home, you stop paying rent — and at that point, you’re no longer part of the scheme.

Equity release allows homeowners aged 55 and over to unlock a portion of the money tied up in their home — without having to move or make monthly repayments.

It’s most commonly done through a lifetime mortgage, where the money is repaid when you pass away or go into long-term care. Until then, you stay in your home and live as usual.

But here’s the catch: equity release is only available on properties you own outright. So if you still only own part of your shared ownership home, you’ll first need to buy out the remaining share.

This is where equity release can be useful — because it could give you the funds to complete that purchase.

Let’s say you’ve staircased up to 80% ownership of your home. That remaining 20% is still with the housing provider — and you’re still paying rent on it. If your property is worth enough, you may be able to use equity release to buy that final slice, becoming the full owner and eliminating your monthly rent at the same time.

Once you own the entire property, the equity release plan can proceed, releasing any remaining cash for you to use however you wish — whether that’s home improvements, helping family, or simply enjoying life.

Every case is a little different, but generally, equity release on a shared ownership property is possible if:

• You’re at least 55 years old
• Your home is worth £70,000 or more (this may be higher for flats)
• You’ve already staircased a large share — enough that releasing equity would allow you to buy the rest
• Your provider approves the transaction (these are usually assessed on a case-by-case basis)

This is why it’s so important to speak with a specialist adviser. They’ll look at your situation in detail and help you understand whether it’s viable — and if so, what options you have.

You don’t need to be mortgage-free or own a mansion to qualify. You’ll usually be eligible for a lifetime mortgage if:

• You’re aged 55 or over
• You own a home in the UK
• Your property is worth at least £70,000
• If applying as a couple, the youngest homeowner must be 55 or older

Different lenders may have different criteria, which is why personalised advice is so important.

Take a 71-year-old homeowner who’s already staircased to 80% ownership. His home is now valued at £300,000. Using equity release, he accesses 50% of that value — £150,000 — which is more than enough to:

• Buy the remaining 20% from the housing provider
• Stop paying rent altogether
• Buy a new car to enjoy his retirement
• Gift money to his daughter for her first home deposit

He didn’t need to sell, move out, or take on new monthly bills — and now, he’s the full legal owner of his home.

Shared ownership isn’t the only alternative property arrangement. If your home ownership falls into one of the categories below, you may still be eligible for equity release — and here’s how it could work.

Yes, equity release is possible on leasehold homes, but most lenders will require a minimum lease term remaining — usually at least 90 to 120 years. Your solicitor will check the details as part of the process.

If your property is jointly owned (for example, with a spouse or partner), both parties must apply together. Joint ownership is different from shared ownership — you both own 100% of the property together, and equity release is perfectly possible, provided the youngest applicant is over 55.

Need to remove someone from the deeds (e.g. after a divorce)? That can be done as part of the equity release process, provided all parties agree.

Equity release plans can only be arranged on homes owned by one or two people. If there are three or more owners, you’ll need to remove the additional names from the title deeds first — your solicitor can usually arrange this during the application.

If you bought your home using a shared equity loan (like Help to Buy), you might still qualify for equity release — especially if the loan is small and you plan to use your equity release funds to clear it.

Because these loans rise in value alongside your home, it’s important to get advice early. Clearing a shared equity loan with equity release could increase your monthly income and give you full control of your property.

If you’ve worked hard to build up equity in your shared ownership home, equity release could offer a way to finally take full ownership — and unlock even more value while you’re at it.

It’s not a one-size-fits-all option. You’ll need to meet certain criteria, and your application may be assessed individually by lenders. But for many over-55s, it’s a realistic option that offers both freedom and financial flexibility.

Whether you’re thinking of buying out the last share, reducing your monthly outgoings, or freeing up money for retirement goals, speaking to a qualified adviser is the best next step.