What can you afford? - First time buyer

How does shared ownership work?

5 min read

Shared ownership is an affordable home ownership scheme introduced to help first-time buyers get on the property ladder. Discover what shared ownership is and how the scheme works, as well as key things to consider before you apply.

  • Abigail Bolton Senior Digital Website and Content Marketing Executive
    Abigail Bolton

    SEO Specialist and Senior Copywriter

    Published March 27th 2024

houses in a new estate which you can purchase through shared ownership

What is shared ownership?

Shared ownership is an affordable home ownership scheme that allows you to purchase a property portion, with an initial share of between 25% and 75%. You get a mortgage for the share you can afford, and then pay rent on the remaining portion that belongs to the housing association.

Shared ownership enables you to choose from a variety of homes across the UK – including new-builds and resale properties.

Can I fully buy out a shared ownership home?

After you’ve bought the property with your initial share, you can buy additional shares until you gain full ownership. This is called staircasing.

Am I eligible for shared ownership?

Eligibility varies depending on the property size and the local authority criteria. However, you need to meet the following requirements:

  • Your household earns less than £80,000 (£90,000 if you live in London).

  • You can’t afford the deposit and mortgage payments for a home.

One of the below must also be true:

  • You’re a first-time buyer.

  • You used to own a home but can’t currently afford to buy one.

  • You’re forming a new household.

  • You’re an existing shared owner and you want to move.

  • You own a home and want to move but cannot afford a new one that meets your needs.

Shared ownership pros and cons

Explore the advantages and disadvantages of the scheme to decide if it’s right for you.

Advantages of shared ownership:

  • You can easily get on the property ladder and own at least part of your home.

  • You pay rent on a property that you could eventually fully own.

  • You can sell your share anytime, meaning you could benefit if your home’s value has increased.

  • Deposits are typically lower than buying on the open market, and mortgages are more accessible, even if you’re on a low income.

Disadvantages of shared ownership:

  • No matter your share, you must pay 100% of any ground rent and service charges.

  • You might struggle to gain full ownership of the property if its value increases.

  • You’re not allowed to sub-let your home and there might be restrictions on what alterations you can make on the property.

  • Selling your shared ownership property can be more complicated than a traditional sale.

How much does shared ownership cost?

You’ll need to pay your mortgage, rent and a service charge every month. This may seem a lot, but keep in mind that rent payments are usually more affordable than renting on the open market.

Here’s a breakdown of the costs:


The rent level is set by the housing association, but generally the annual rent is no more than 3% of the share that you own. The amount of rent will therefore reduce when you buy additional shares.

For example, if you bought a 50% share of a £200,000 property, you’ll have to pay rent for the other 50% share that belongs to the housing association. This means you would pay rent on the £100,000.

The housing association will charge rent of 3% of this amount, which equals £3,000 per year and £250 per month. Remember, this amount will be payable in addition to the mortgage on the 50% that you own.

Your housing association will usually have a rent review process, meaning your rent can go up. They could let you know how they calculate an increase so you can budget for the future.


Your monthly mortgage repayments will be based on the value of your purchased share, deposit, interest rate and remaining length of your mortgage deal. Find out how to get a mortgage.

Service charges

These are payments you need to make to the housing association for services – such as maintenance and repair of communal areas, as well as management of the accommodation. The amount will vary depending on things like the type of property, number of communal areas, and your housing provider.

Shared ownership FAQs

Is it harder to sell a shared ownership property?

Selling your shared ownership home can be more complex than a standard sale. The process is practically the same, however because the housing association still own a percentage of the house, you must give them the option of buying it, or finding a buyer, before you can put it on the market.

Can you sell a shared ownership property to anyone?

As the housing association still own a percentage, they have a nominated period where they have the option to try and find a buyer before you can put it on the market yourself. If they find a buyer, your share will be sold at no more than the current market value, which is specified by a RICS surveyor.

How much do you have to put down as a deposit when buying a property through shared ownership?

For most house purchases you can have a house deposit as little as 5% and this is no different why buying a shared ownership home. The difference is, is that because you are only buying a percentage of the home, your mortgage will be smaller, and therefore your deposit can be smaller too. For example, if you buy a 50% share of a property valued at £200,000, you would need to save £5,000 for a 5% deposit. Find helpful tips on how to save for a deposit.

Other ways of getting help to buy a home

Not sure if shared ownership is for you? You can get financial help from the government through other affordable home ownership schemes. For example, if you’re a first-time buyer, you can benefit from a new-build home loan. Find out more about other help to buy schemes.

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