UK home financing
Three routes finance a UK home purchase: paying in full, taking a mortgage, or buying a share of the property through shared ownership. Mortgage advice and arranging is a regulated activity, and only authorised firms provide it.
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- Ask for the firm's full legal name and its registration number.
- Search that name on the Financial Services Register.
- Read which activities the registration covers; mortgage arranging must appear.
- Compare the contact details on the register with those the firm gave you.
- Stop if no entry is found or the permissions do not match.
The ownership type page sets out what a buyer actually acquires; how that acquisition is paid for falls under a separate regime, supervised in the United Kingdom by the Financial Conduct Authority. For the forms of ownership themselves, see UK property ownership types.
01
What routes finance a home purchase in the UK?
Three routes are used: paying the full price, borrowing from a mortgage lender, and shared ownership, where a buyer purchases between 10 and 75 per cent of the property and pays rent to the landlord on the remaining share.
| Route | What is acquired | Recurring payment | Regulated by |
|---|---|---|---|
| Cash purchase | The whole property | None | — |
| Mortgage | The whole property, secured against the loan | Loan instalment | Financial Conduct Authority |
| Shared ownership | A share of the property | Instalment plus rent on the rest | Financial Conduct Authority |
The route chosen is not independent of the ownership type. Where a leasehold flat has fewer years remaining than a lender's minimum, the lending does not proceed, so financing and ownership type are assessed together.
02
Who regulates mortgages?
Mortgage advice and arranging is a permissioned activity in the United Kingdom. Almost every firm providing financial services has to be authorised or registered by the Financial Conduct Authority, and the permission granted also sets which products the firm can offer.
Permission is granted activity by activity. A firm appearing on the FCA register is not thereby cleared to offer every financial service: the register lists each activity the firm is permitted to carry on, and mortgage arranging is one entry among them.
03
How is an adviser's authorisation checked?
A firm's authorisation is checked before any product is bought, using the FCA's Financial Services Register and its Firm Checker. Someone dealing with an unauthorised firm, or one without permission for that activity, loses access to the Financial Ombudsman Service.
The Financial Services Register is the public record of firms and individuals authorised by the FCA and the Prudential Regulation Authority. No payment is made before the registration number is verified, and contact details on the register that differ from those the firm supplied are a known fraud signal.
04
How does shared ownership work?
Shared ownership means buying a share of a property and paying rent to the landlord on the remainder. Shares start at 10 per cent on some homes, the common range runs from 25 to 75 per cent, and rent follows the landlord's share.
Shared ownership is built for buyers who cannot meet the deposit and instalments on a whole property. A mortgage covers the share purchased, rent covers the landlord's share, and both payments fall in the same month.
| Item | Paid to | Set against |
|---|---|---|
| Mortgage instalment | The lender | The price of the share bought |
| Rent | The landlord | The landlord's remaining share |
| Service charge | The managing agent | The building's running costs |
Free starter report
Let us draw up your free starter report
Five short questions. In return you get a one-page report setting out the steps, the documents, the official fees and the timings for the route you chose, each with its source.
05
Can the share be increased later?
The share is increased after purchase through a process called staircasing, and rent on the remaining share falls as the owned share grows. Shared ownership applies to newly built homes and to existing homes sold through a resale scheme.
- Staircasing buys further shares on top of the share already held.
- As the owned share grows, the rent paid to the landlord falls.
- Newly built homes are sold under shared ownership.
- Existing homes change hands through the shared ownership resale route.
- A separate shared ownership route exists for buyers with a disability.
06
What is checked before a financing decision?
Four things are checked: the firm's FCA registration, the total cost of the borrowing, the ownership type of the property, and the rent where shared ownership applies. An authorised adviser and a conveyancing solicitor carry out those checks together.
07
What does British Global do on financing?
British Global provides information and referral: it sets out the routes and the published rules, prepares a preliminary report on area and budget, and refers you to an FCA-authorised adviser where an assessment is needed. It does not arrange credit.
- A preliminary report is prepared against area and budget.
- The financing routes and the recurring payments they create are set out.
- Assessment of borrowing is referred to an FCA-authorised adviser.
- Ownership type and legal review are referred to a solicitor.
Sources
- GOV.UK — Shares of 10 per cent are available on some homes and the common range is 25 to 75 per cent; rent is paid to the landlord on the remaining share and the share is increased later through staircasing.
- Financial Conduct Authority — Almost all firms providing financial services must be authorised by the FCA; dealing with a firm that is not authorised, or lacks permission for the activity, removes access to the Financial Ombudsman Service.
- Financial Conduct Authority — The Financial Services Register is the public record of firms and individuals authorised by the FCA and the Prudential Regulation Authority.
- Financial Conduct Authority — The Firm Checker shows, before a financial product or service is bought, whether a firm is authorised and which products it has permission to sell.
