What does 'shared equity' mean in leasehold terms?

Shared equity in leasehold terms refers to a financial arrangement in which the buyer owns a portion of the property, while a lender or another entity retains ownership of the remaining share. This arrangement allows the buyer to enter the property market with a smaller initial investment, as they do not need to purchase the entire property outright.

In shared equity schemes, the buyer makes mortgage repayments on their owned share of the property and might pay rent or a similar fee for the portion held by the lender. This model can make homeownership more accessible, especially for those who may not have sufficient funds for a full purchase.

It is distinct from full ownership, where the buyer has complete control and rights over the property, as well as from government programs that may offer additional support but do not necessarily involve shared ownership. Understanding the shared equity concept is important for recognizing various forms of property ownership and financing options available in the real estate market.