Shared Ownership
If you’re struggling to afford a deposit and mortgage, shared ownership is another way to get on the ladder.
Last updated on
May 12, 2025 15:15
Shared ownership is a government-backed scheme to help people who can’t afford a deposit and mortgage to buy a home. It’s part rent, part buy.
This could work for you if you’re squeezed in what you can borrow, since you’re buying just part of a property, not the whole place, and renting the rest. The idea is that over time, you buy more of it. But there are ongoing costs and you have to be eligible, so here’s the lowdown.
This guide covers the schemes in England, but there are similar ones for the rest of the UK.
Shared ownership homes are new-builds and resale properties and they’re usually sold by housing associations, local councils, and other non-profits. These providers are also the landlords.
All shared ownership homes are leasehold not freehold, so you won’t own the land itself.
You’ll be buying a share – typically 25%-75% but it can go as low as 10% – of your home’s full value and then paying rent for the rest (the part that’s still owned by your landlord).
To pay for your share, you can use a mortgage. And you’ll need to pay a deposit, which is typically 5%-10% of the share you’re buying.
Over time, you can keep buying a bigger share of the property until eventually you own the whole place, which is called “staircasing”. Typically this is done in chunks of at least 10%. Once you own 100%, you stop paying rent. In the meantime, the bigger the share you own, the less rent you’ll pay to the landlord for their share.
There are a few places where you won’t be able to own 100% but usually you can.
Plus, one of the following must apply to you:
Some developments prioritise people who live or work locally.
It’s possible to get shared ownership with a less-than-perfect credit history, but it will depend on how bad and how recent the credit issues were. As it’s not straightforward, it’s a good idea to have a chat with a broker.
If you're planning to use a mortgage for shared ownership, there will be two hoops to jump through, not one. That’s because you’ll need to pass the mortgage lender’s credit and affordability checks but you’ll also need to pass rent affordability checks done by the provider (the landlord).
Some shared ownership schemes state that you need a good credit history, but since there’s no single definition of what that means, it’s worth discussing it with any schemes that specify this.
Some people have found that they can get a mortgage for shared ownership, but the landlord declines their application because of credit issues.
Before you consider applying for anything, get to know your credit score and understand how to improve it.
And you can chat with a broker for free about what mortgages are available to you.
As well as paying the rent for the share you don’t own, you’re likely to pay monthly ground rent and service charges, to cover maintenance of communal areas like gardens.
And if you use a mortgage to buy your share, you’ll be making monthly mortgage payments as well, so be sure you can afford all of this before you apply.
Landlords typically review the rent every year, so your rent could rise but there are set limits on how much rent your landlord can charge you.
Below is a breakdown of costs for a two-bedroom, new-build shared ownership flat in Kent, in May 2025, with a 5% deposit.
Full market value: £253,000
25% share: £63,250
5% deposit of 25%: £3,163
Rent on unowned share: £435 per month
Service charge: £225 per month
Mortgage payment: £348 per month
Monthly costs total: £1,008.
This monthly total is rent plus the service charge plus mortgage payments for a £60,087 mortgage, at 4.9%. There would also be council tax and utility bills to pay, too.
Figures from the estate agency site Rightmove from March 2024 suggest that shared ownership homes sell faster than other types of property – 56 days to sell shared ownership vs 65 for the rest, on average.
You can sell a shared ownership home whether or not you own 100% of it. But if you don’t own 100%, you’ll need to let the housing provider know you want to sell, and it has the right of “first refusal”, meaning it can buy it back, or find a buyer, who typically needs to buy at least the same share that you had.
If you own the whole thing, you can usually sell it on the open market. There’s also an option to “staircase” to 100% and sell at the same time, on the open market. Some homes are covered by a “mandatory buyback” meaning the landlord will decide the buyer.
There are some issues that can make a shared ownership home less attractive to buyers. If the remaining lease on your home is too short, it can be tricky to sell or remortgage it. And this can affect the value. So before you buy, make sure you know how much of the lease is left to run.
Lastly, the rising cost of service charges has been controversial recently and the industry has been trialling a code of practice to ensure these charges are both clear and affordable.
Pros
Cons
Shared ownership works well for many people who’ve struggled to afford their own place, but there are more moving parts to consider and a lot depends on the small print in your lease.
If you’re planning to use a mortgage to buy a share, or you’re not sure what you can afford, it’s a good idea to chat through your options with a broker.
An unencumbered mortgage is a type of mortgage you take out on a mortgage-free property. Here’s everything you need to know about unencumbered mortgages.
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