What is Shared Ownership?

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What Is Shared Ownership? | Shared Ownership is a government-backed scheme that helps individuals step onto the property ladder by purchasing a share of a home while paying rent on the remaining portion. Offered primarily through non-profit housing associations, this approach enables buyers to access property ownership with a lower deposit and smaller mortgage, making it especially attractive for first-time buyers and those with limited savings.

How Does Shared Ownership Work?

Instead of buying a home outright, you purchase a share (typically 25% to 75%) of the property and pay subsidised rent on the portion you don’t own. Because you’re only financing part of the property’s value, your mortgage requirements and deposit size are significantly reduced.

While this structure lowers monthly repayments, there are important ongoing costs to consider:

  • Rent on the remaining share owned by the housing association

  • Service charges (often for maintenance of communal areas)

  • Ground rent, like all Shared Ownership properties, including houses, is leasehold, which is uncommon for free-standing homes.

What Types of Properties Are Available?

Shared Ownership properties can include:

  • Newly built homes

  • Re-sale (existing) Shared Ownership homes

  • Flats and houses

Regardless of type, all are sold on a leasehold basis, even standalone houses. Buyers should review lease terms carefully and understand any long-term obligations such as service charge increases or lease extensions.

Shared Ownership Eligibility Criteria

To qualify for the Shared Ownership scheme in the UK, you must meet the following requirements:

  • Buyer Status: You must be a first-time buyer, an existing Shared Ownership homeowner looking to move, or a former homeowner unable to afford a new home outright.

  • Age: Applicants must be over 18 years old.

  • Income Limits: Your household income must not exceed:

    • £80,000 per year outside London

    • £90,000 per year within Greater London

Alternatives to Shared Ownership

While Shared Ownership offers a path to affordable homeownership, it’s not the only option available. Consider alternatives like the Help to Buy scheme, where the government lends up to 20% of a property’s value (or 40% in London), reducing your mortgage requirements.

You may also explore:

  • First Homes Scheme – offering discounts to local key workers and first-time buyers

  • Right to Buy – enabling eligible council tenants to purchase their homes at a discount.  Learn more by reading our Right to Buy Scheme blog.

  • Shared Equity Mortgages – where you co-own the property with an equity partner, often the developer

Each of these schemes can suit different financial situations and long-term goals.

Why Choose a Shared Ownership Property?

Shared Ownership is an innovative and accessible route to homeownership for those priced out of the full property market. Designed to reduce financial barriers, this government-backed scheme offers a flexible way to get on the property ladder with significantly lower upfront costs.

Lower Deposit Requirements

One of the key advantages of Shared Ownership is the low deposit requirement. Instead of saving for a full property deposit, buyers typically need only 5–10% of the share price, not the entire home’s value. For example, buying a 25% share in a £300,000 property would require a deposit of just £75,000, not the full amount. This feature makes Shared Ownership ideal for first-time buyers or individuals with limited savings.

Affordable Monthly Costs

Shared Ownership homes offer below-market rent on the remaining share of the property, typically set at around 2.75% of the unsold value annually. Combined with a lower mortgage on the purchased share, this keeps monthly housing costs more manageable than with full ownership or private renting.

Buyers can also start small: under the current model, you can purchase a minimum 10% share, giving you the flexibility to scale based on your budget. Older schemes typically start from 25%, but both offer a pathway to staircasing increasing your ownership share over time.

Stamp Duty Flexibility

With Shared Ownership, many buyers benefit from Stamp Duty Land Tax (SDLT) relief. In most cases, SDLT can be deferred until your share reaches 80%, providing additional breathing room in the early stages of ownership. This makes budgeting easier, especially when combined with reduced deposits and rent.

Access to Desirable Locations

Thanks to affordable housing obligations in many private developments, Shared Ownership properties are often available in prime urban or suburban areas. Buyers can secure homes in highly sought-after neighbourhoods that might otherwise be out of reach financially.

This approach mirrors the strategy used in larger residential planning to ensure communities remain diverse and inclusive, with shared ownership options woven into premium postcodes.

Flexible Path to Full Ownership

Unlike some housing schemes, Shared Ownership allows you to gradually increase your stake in the property, a process known as staircasing. This flexibility gives you control over your financial journey and the potential to own 100% of your home eventually.

Learn More About Affordable Property Options

Explore other affordable buying routes through our guides:

Key Considerations When Buying a Shared Ownership Property

Now that you understand the basics of what Shared Ownership is, it’s important to dive deeper into what to consider before moving forward with a Shared Ownership property. This government-backed scheme has helped thousands enter the housing market over the past 40 years by blending aspects of renting and owning, but it’s not the right fit for everyone.

Deciding to buy through Shared Ownership is a long-term commitment. It’s essential to ensure that the property, lease terms, and financial obligations align with your current situation and future goals.

Leasehold Structure and Long-Term Costs

Most Shared Ownership properties are leasehold, meaning you’re buying the right to live in the property for a set number of years. You’ll likely need to extend your lease over time, especially if it falls below 80 years, which can impact property value and mortgage eligibility.

In addition to potential lease extension costs, you’ll need to factor in:

  • Annual service charges

  • Monthly rent on the unsold share

  • Ongoing maintenance responsibilities

These costs can fluctuate, so it’s critical to understand how they’re calculated and what’s included in your agreement.

 Understanding Your Financial Obligations

Beyond your initial purchase, Shared Ownership involves recurring payments. Rent on the remaining share typically increases annually, often tied to RPI or another index. Make sure you’re clear on:

  • How rent increases are structured

  • What happens when you staircase (buy more shares)

  • Whether you can afford costs if your income changes

Before committing, review your full financial picture or speak to a Shared Ownership mortgage broker who can help you assess affordability.

Property Management and Responsibilities

As a leaseholder, you may be responsible for repairs and upkeep, especially for internal fixtures, even though you don’t own the entire property. Clarify who handles major works and how service charges are used.

If the property is part of a larger development, check how the housing association manages communal areas and whether complaints or maintenance requests are resolved efficiently.

Legal, Regulatory, and Market Factors

Shared Ownership is subject to evolving government schemes, eligibility criteria, and housing policy changes. It’s wise to stay informed about the latest updates or consult a solicitor experienced in Shared Ownership conveyancing to avoid legal pitfalls.

Understanding UK property market trends can also help you choose a good location and forecast long-term value. If you’re considering other affordable home options, you might also explore Help to Buy alternatives or first-time buyer mortgage support.

Seek Expert Guidance

Given the legal and financial complexity of Shared Ownership property, professional advice can save you time, stress, and money. A specialist Shared Ownership mortgage adviser can guide you through lender options, approval steps, and lease reviews tailored to your situation.

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