Esther Shaw takes you through what you need to know about shared ownership, how it works, the pros and cons and if it’s worth it with her comprehensive guide
Shared ownership is a Government-backed affordable housing scheme aimed at helping those struggling to buy on the open market.
It enables people in this position to get a home by purchasing a ‘share’ of a property – and then paying rent on the remaining amount. Rent is paid to the housing association that owns the house.
Over time, as funds allow, there is then the option for the buyer to increase their stake, via a practice known as ‘staircasing.’
While the scheme can make purchasing a home a lot more accessible to first timers (as well as certain other buyers, too), many house-hunters are unsure what’s involved – or whether it’s a good fit for them.
Here we take a closer look at how shared ownership works, who is best suited to this approach, and the key benefits and drawbacks.
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This scheme involves you buying a share in a property (typically anything between 25% and 75%).
Over time, as life allows, you can opt to buy more of the property (via ‘staircasing’) until you are the outright owner.
You take out a mortgage to pay for just this share of the home’s price; this means a lower purchase price and lower deposit. You then pay rent on the rest.
Your monthly payments include mortgage and rent – as well as service charges. As the rent is subsidised by the housing association, this makes it more affordable in theory.
But with shared ownership you are restricted to particular properties, such as new-builds and homes in the scheme are leasehold.
Pros and cons of part-buy, part rent
Here we take a look at some of the pros and cons of shared ownership:
| Pros | Cons |
| Lower deposit requirements | There’s a lot of competition for properties |
| Enables you to step onto the property ladder sooner | You’ll face ongoing service charges which can be high. You’ll also face ongoing rent which can go up |
| Makes buying a home far more accessible, especially in high-cost areas such as the southeast | If the property requires maintenance and repairs, you are responsible for the cost |
| Opportunity to increase ownership over time through staircasing | There are lots of rules that come with a leasehold property, such as not being able to make structural changes |
| Can be a helpful option for those looking to buy on their own | If you’re thinking about staircasing, you need to understand the fees and limits |
| There are lots of restrictions when it comes to selling your shared ownership home. The process can be very tricky and potentially costly (more below) |
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Qualifying criteria and affordability
To be eligible for shared ownership you must have the legal right to live in the UK and meet long-term residency requirements.
While the scheme is targeted at first-time buyers, it’s not limited to them. You could also qualify if you are a ‘previous homeowner’ struggling to afford to get back onto the property ladder. But you must be able to evidence this.
You also need to make sure that:
- Your income must not exceed £80,000 a year (or £90,000 if you’re looking to buy in London)
- Providers will assess whether you can realistically cover the mortgage on the share you want to buy, taking into account the subsidised rent and service charges
- You’ll need to provide details of your income and outgoings
- You’ll also need a good credit history as part of the affordability checks; you must not be in mortgage or rent arrears
- You typically have to have a deposit based on the share of the property you are purchasing (not the full value)
- You will need to secure a shared ownership mortgage from a participating lender.
The most common types of mortgage are fixed-rate deals. To get an idea of costs, have a play around with our affordability calculator. To find out more about mortgage rates, head here.
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If you’re wondering whether shared ownership is a good idea, one key thing you need to know is that selling under this scheme can be trickier than selling other types of property.
If you own your shared ownership home outright, you can usually sell it on the open market.
If, however, you own less than 100%, you must inform your housing association or local authority, as they have the right to sell it on your behalf. This can get a lot more complicated.
Be sure to check the lease for any restrictions on selling. Also note that any potential buyer will need to meet all relevant eligibility requirements.
Bear in mind that ‘selling costs’ can mount up. These can vary so it’s best to check with your housing association.
Given this approach can be both complex and expensive, you may be wondering whether shared ownership is worth it. While the scheme won’t be a good fit for all buyers, shared ownership may be the right option for you if:
- You have a smaller deposit
- You’re buying a home on your own
- You have a stable income and good credit history
- You’re looking to get onto the property ladder in an area where affordability pressures are especially high, such as the south-east of England
- You can comfortably afford not only mortgage payments but also subsidised rent on the share you don’t own – as well as the service charge
- You like the idea of gradually increasing the ‘amount’ you own over time, through staircasing
- You’re planning on staying in the property for several years, as this makes the ‘costs of buying’ worthwhile
- You’re comfortable with leasehold terms
- You’re OK with the idea of having restrictions on selling
Equally, if shared ownership isn’t the right fit for you, this isn’t a problem, as there are a host of other routes to home ownership that you can explore.
These include:
Lifetime ISA
this Government scheme helps first time buyers build a deposit. You can slot away up to £4,000 per year, with the Government adding a 25% bonus on top (up to £1,000 annually). The funds can then be used to purchase a property worth up to £450,000
The First Homes scheme
This gives a discount of between 30% and 50% off a new-build home. Your income needs to be £80,000 or less, and you have to be able to get a mortgage for at least half the price of the property. Read more here.
Stamp duty incentive
While some buyers had been enjoying a stamp duty holiday for a time, this ended on April 1, 2025, meaning the ‘nil-rate threshold’ for this tax has fallen from £250,000 to £125,000
Bank of Mum and Dad
If you’re in the fortunate position of having parents with spare cash in savings, they may be willing to put some of this towards a deposit. Make sure everyone knows what they are getting into.
Explore your home buying options
If you’re interested in shared ownership – and think this is the right option for you – then you need to start getting your ducks in a row to prepare for your mortgage application.
First off, it’s worth asking around and finding out more about providers in your area.
After this, you should check whether you meet the eligibility and affordability criteria (laid out above).
You will then need to know how to get a shared ownership mortgage. part of your research, you could take a look at mortgage options and use our mortgage affordability calculator to get an idea of how much you might be able to borrow. Note that shared ownership mortgages can be more expensive than normal mortgages. To find out more about the different types of mortgage, head here.
Can I buy the whole property later?
Yes, with this scheme, you can increase your ownership percentage over time until you eventually own the property outright. You can do this via a process known as ‘staircasing’.
Do you pay stamp duty on shared ownership homes?
The answer is a bit tricky. In short, you have to decide between paying stamp duty on the whole property – or paying it just on the share you’re buying.
With the latter, you may pay little or no stamp duty at the start if the share you purchase is below the stamp duty threshold. However, you may then pay more stamp duty further down the line if you opt to ‘staircase.’
The exact amount you pay on any shared ownership home will depend on factors such as how much of the house you own, the property value – and how you’ve opted to pay this tax.
Can you decorate or renovate a shared ownership home?
Generally speaking, there is nothing to stop you painting walls, changing flooring or carrying out other decorating jobs. If, however, you’re contemplating bigger renovations and structural changes, these may not be allowed – or you may need to get permission.
Always check the lease and speak to your housing association before embarking on any large project.
Can I let my home?
No. You are usually not allowed to let the property once you own it. The shared ownership scheme is designed for ‘owner-occupiers’ who need affordable housing. By letting your home, you risk breaching the terms of your lease.
Important
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