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It’s an ownership thing.
Understanding shared ownership service charges: what you need to know
If you’re considering buying a shared ownership home, understanding how service charges work is essential. Service charges are monthly fees that cover the cost of maintaining and managing the communal areas and services in your building or development. These charges can vary depending on the type of property, the location, and the amenities provided. They form part of your overall housing costs, so they need to be understood. In this guide, we’ll explain everything you need to know about shared ownership service charges, from what they include and how they're calculated, to when you pay them and how they can affect your monthly budget. Whether you're a first-time buyer, staircasing to full ownership, or comparing housing options, this page will help you understand your responsibilities and plan with confidence.
Shared ownership service charge FAQs
What is a service charge in shared ownership?
A service charge covers the cost of communal services, including cleaning of communal areas, ground maintenance (communal outdoor areas for flats and outdoor areas for developments, this does not include your own personal garden), lifts, lighting, fire alarms, and door-entry systems. There may also be other associated costs within your service charges, contact us to find out more.
Do I still pay the full service charge if I only own part of my home?
Yes, with shared ownership, you pay 100% of the service charge, even if you only own a share of the home. This is because you have full access to the building's communal areas and benefit equally from their upkeep.
How is shared ownership service charge calculated?
Service charges are usually estimated at the start of each financial year based on expected costs. At the end of the year, a reconciliation is done:
● If costs were lower than expected, you may get a refund or credit.
● If costs were higher then this will be factored-in to the calculation for the following years’ service charge or, in some instances, an additional bill will be charged.
Why are service charges estimated, and can they increase?
Service charges are calculated in advance based on estimated annual costs for maintenance, utilities, and communal services. At year-end, actual figures are reconciled, meaning you may receive a refund or be billed more if costs exceed estimates. Charges can increase due to inflation, repairs, or major works.
What’s included in shared ownership service charges?
Service charges vary between developments, but they typically include:
● Cleaning and lighting of communal areas
● Landscaping and grounds maintenance
● Repairs to shared features (lifts, security systems, fire alarms)
● Building insurance
● Management fees and admin costs
● Contributions to a fund for major repairs
Can my service charge go up?
Yes. Like most household costs, service charges can increase due to inflation, development changes, or unexpected repairs. That’s why it’s important to build flexibility into your monthly budget.
What happens if I can’t afford to pay the service charge?
Contact us. We can offer you support options such as:
● Setting up a payment plan
● Providing guidance on financial support schemes
● Offering advice through tenant welfare services
Can I dispute or negotiate my service charge?
Yes, service charges must be fair, transparent, and lease-compliant. If you’re concerned about unreasonable or inflated charges, you can:
● Ask for a full breakdown of charges
● Supporting invoices or contracts
● Clarification on what services you are paying for We are here to help.
What’s a sinking fund?
A sinking fund is a reserve account used for major building repairs, such as roof replacements or lift upgrades. Your service charge may include contributions toward this fund to prevent large, unexpected costs in the future.
Can service charges make shared ownership unaffordable
Despite the addition of service charges, shared ownership remains one of the most affordable ways to get on the property ladder. Because you’re only purchasing a portion of the home, typically between 10% and 75%, your mortgage deposit and monthly repayments are significantly lower than buying outright. While you’ll pay a service charge to cover communal maintenance and building upkeep, this cost is often comparable to, or even lower than, fees in private rental apartments or leasehold flats. When combined with subsidised rent and the ability to staircase over time, shared ownership offers long-term flexibility and stability that can make it more financially manageable than renting in the open market or saving for a full purchase. It’s a smart choice for first-time buyers, and anyone looking for a secure, part-buy part-rent housing option.
What does shared ownership mean?
Shared ownership means you buy a share of the property and pay rent on the remaining share owned by us at Aster.
If you need more information around how shared ownership works, take a look at our guide.
Benefits of shared ownership
1. Affordability: Shared ownership allows you to get on the property ladder with a smaller deposit and mortgage.
2. Flexibility: You can buy more shares as your financial situation improves.
3. Security: You have the security of owning a home, with the option to increase your share over time.
4. Support: Here at Aster, we can provide support and advice to help you manage your property.
Who are Aster?
At Aster, we're proud to offer beautiful new shared-ownership homes across the South of England and London. Our homes are perfect for those looking to make a great start on the property ladder and take advantage of all that this incredible area has to offer. Our aim at Aster is to find you a home, not just a house – and with our fab shared ownership approach, you can find a home in a lovely location that may otherwise be out of your reach, just get in touch!
Finding your dream home
Finding your dream shared ownership home is as simple as giving us a call and letting us walk you through the steps you need to take. With this guide and guidance from the team at Aster, we can make the process a piece of cake. At Aster, we’re committed to making the process as smooth and stress-free as possible. Our knowledgeable and friendly sales team are always on hand to provide expert advice and guidance, helping you to find your perfect shared ownership home. Whether you’re a first-time buyer or a seasoned homeowner, we’re here to help you every step of the way.
