Shared ownership lets a buyer purchase a share of a home, usually between 25% and 75%, with a mortgage on that share and rent on the part a housing association still owns. On a £300,000 home a 40% share needs a deposit of about £12,000 and costs around £1,163 a month in mortgage, rent and service charge, against roughly £1,500 for a full purchase with a £30,000 deposit. The lower entry cost is real; so are the rent rises, the leasehold charges and the fact that only the share you own grows in value. The scheme suits buyers who cannot reach a deposit or a mortgage for the whole home and expect their income to rise.
What a £300,000 home costs by share
| Share bought | Value of share | Deposit | Mortgage on the share at 4.5% over 25 years | Rent on the rest at 2.75% a year | Service charge | Monthly total |
|---|---|---|---|---|---|---|
| 25% | £75,000 | £3,750 at 5% | £396 | £516 | £150 | £1,062 |
| 40% | £120,000 | £12,000 at 10% | £600 | £413 | £150 | £1,163 |
| 75% | £225,000 | £22,500 at 10% | £1,126 | £172 | £150 | £1,448 |
| 100%, ordinary purchase | £300,000 | £30,000 at 10% | £1,501 | none | varies | £1,501 plus any service charge |
Rent on the unsold share is normally set at 2.75% of its value a year on new-build schemes, so the smaller the share bought, the larger the rent. The monthly totals for a 25% and a 40% share are close because a bigger share swaps rent for mortgage, and mortgage payments build equity while rent does not. Service charges on shared ownership flats commonly run from £100 to £250 a month and apply to the whole property, not just your share. The shared ownership calculator sets the mortgage, rent and charges for any price, share, deposit and rate.
Who qualifies
Household income must be £80,000 or less outside London and £90,000 or less in London, the buyer must be unable to afford a suitable home on the open market, and must not own another property at completion. First-time buyers, former owners who cannot now afford to buy, and existing shared owners moving home all qualify. Homes are sold through housing associations and local Help to Buy agents, with new-build schemes and resales of existing shared ownership homes both available. Since 2021 new-model leases allow an initial share as low as 10%, although lenders and providers still commonly require 25%.
Staircasing: buying more of the home
Owners can buy further shares, known as staircasing, at the market value of the home at the time, usually in steps of 10% or more, with new-model leases allowing 1% purchases each year for the first fifteen years. Each purchase reduces the rent and increases the mortgage, and each valuation and legal step costs money. Because shares are bought at current value, a rising market makes staircasing more expensive over time and a falling one cheaper. Reaching 100% converts the home to ordinary ownership, although a flat remains leasehold. The mortgage affordability calculator shows the loan available for the next share.
The costs that catch people out
| Cost | What to expect |
|---|---|
| Rent increases | Reviewed annually, rising with inflation plus a margin set in the lease, typically RPI plus 0.5% on older leases or CPI plus 1% on new-model leases |
| Service charge and buildings insurance | Payable on 100% of the home and outside your control; check the history and the reserve fund |
| Repairs | The owner’s responsibility for the whole home, with new-model leases offering limited repair support for the first ten years |
| Selling | The housing association has a period, typically eight weeks, to find a buyer before you can sell on the open market, and you receive only your share of the sale price |
| Lease length | Flats are leasehold; a lease below 80 years is expensive to extend and hard to mortgage |
| Stamp duty | Payable either on the share bought or on the full market value up front; paying on the full value avoids further duty on staircasing |
A shared owner pays 100% of the running costs while owning 40% of the growth, which is the scheme’s central trade-off. Our first-time buyer deposit guide sets out what a full purchase needs, and the rent versus buy calculator compares renting a similar home with buying it outright over any period.
Common questions
How much deposit do I need for shared ownership? Usually 5% to 10% of the share you buy, not of the whole home: £12,000 for a 40% share of a £300,000 property at 10%.
How much rent do I pay? Typically 2.75% a year of the value of the share you do not own, so £412.50 a month on the £180,000 unsold share of a £300,000 home bought at 40%.
Can I buy the rest of the home later? Yes, through staircasing at the market value at the time, in steps set by the lease. Owning 100% ends the rent.
Who is eligible? Households earning £80,000 or less, £90,000 in London, who cannot afford a suitable home on the open market and do not own another property.
Is shared ownership cheaper than renting? Monthly costs are often similar to renting the same home privately, but part of the payment builds equity in your share. Service charges and repairs fall on the owner.
Can I sell a shared ownership home? Yes. The housing association usually has a period to find a buyer first, and you receive your percentage of the sale price less costs.
Information, not financial advice. Figures are from the site’s calculator using a 2.75% rent rate, a 4.5% mortgage and illustrative service charges; actual terms depend on the provider and the lease. Take legal and mortgage advice on any shared ownership purchase before acting on them.