What is the Older Persons Shared Ownership (OPSO) scheme?

The Older Persons Shared Ownership (OPSO) scheme aims to make it easier for older people to buy their own homes as it requires a smaller deposit, and monthly costs are usually cheaper. 

It is similar to a traditional shared ownership scheme, where you buy a share of a property from a housing association and pay rent, as well as monthly service charges and ground rent. 

However, it is aimed at people who are at least 55 years old. 

We’ll reveal how the OPSO scheme works, its eligibility, and its pros and cons. 

What is the Older Persons Shared Ownership scheme? 

The Older Persons Shared Ownership (OPSO) scheme, which is only available in England, allows those aged 55 or over to buy up to a 75% share of a property and pay up to 3% rent on the remaining share. 

With the OPSO scheme, you can purchase between a 10%-75% share of the property’s market value using cash or a mortgage. 

However, it’s important to note you’ll likely have to pay leasehold-related costs, which can be pricey. 

A minimum 10% share is lower than most shared ownership schemes, which usually require you to buy at least a 25% share of the property’s market value.  

If you can buy a 75% share in your property, you won’t have to pay any rent on the remaining 25%. 

Who is eligible for the Older Persons Shared Ownership scheme? 

The OPSO scheme is not open to everyone, so to be eligible, you must: 

• Be aged 55 or over.
• Have an annual household income of £80,000 or less outside of London or a maximum of £90,000 in London.
• Either be a first-time buyer, want to move from an existing home ownership scheme, or you used to own a home but no longer own one and can’t afford to buy a new property.
• Be able to get a mortgage or have enough money to pay the share in full if you’re retired.
• Not have any outstanding credit issues. 

How do you apply for the Older Persons Shared Ownership scheme? 

If you want to apply for the OPSO scheme, you’ll need to do the following: 

• Check if you’re eligible to buy a property via the OPSO scheme.
• Find a property you’re interested in buying by contacting a company that offers shared ownership homes. They can provide more information, organise viewings and check if you can afford it.
• Reserve your property. This may involve a fee of up to £500. Once paid, your home is reserved for a set amount of time, and the fee is taken off the amount you pay on completion day. You might not get a refund if you don’t buy the property.
• Pass a financial assessment with the housing association and a credit check.
• Find a solicitor or conveyancer to do the legal work of buying your new home.  

You can buy a bigger share of your home through ‘staircasing,’ which will result in your mortgage payments rising but your monthly rent decreasing (or stopping if you own a 75% share). 

What are the pros and cons of the Older Persons Shared Ownership scheme?

There are many pros and cons to consider before applying for the OPSO scheme. 

Pros: 

• The OPSO scheme can make it more affordable to buy a property.
• You can choose how many shares in a property you want to buy, with a minimum of 10% and can take advantage of staircasing to gradually increase how much of your home you own.
• If you buy a 75% share in your home, you no longer pay rent.
• Some OPSO properties offer a scheme known as Extra Care, so you can access tailored care services and live independently, but some criteria apply.
• You can likely pass down your share of the property to your beneficiaries.  

Cons: 

• You’ll have to pay monthly mortgage and rent unless you own 75% of your property, as well as service charges, ground rent and administration fees.
• Your mortgage costs will rise if you buy a bigger share of your home.
• You’ll never fully own your home.
• If the value of your property rises, buying more shares in your home can cost more. You may also need to pay associated fees.
• You can’t sublet your home if you can no longer (or don't want to) live in the property.
• It can be harder to sell your property due to leasehold-related charges or restrictive covenants. 

What should you consider when using an OPSO scheme? 

If you’re thinking of using an OPSO scheme, there are a few things to consider. 

Firstly, is this scheme right for you – or are there alternative options worth looking into? 

For example, a traditional shared ownership scheme or the Home Ownership for People with Long-Term Disabilities Scheme (HOLD) are options.  

As you’ll be relying on an OPSO scheme, you’ll need to buy in an area offering shared ownership properties, which may not be your first choice.  

You’ll also need to consider how much you can afford to pay each month in mortgage and rent costs, as well as ground rent and service charges.  

Feeling lost about the next steps? 

It’s a good idea to talk to a specialist mortgage broker if you’re considering an OPSO scheme, as they can look at your circumstances and decide if the decision is right for you. 

Unbiased can quickly connect you to a qualified mortgage broker who can find the most competitive mortgage.