The shared ownership scheme is a government initiative designed to help people get on the property ladder.
Under the scheme, you can buy between 10% and 75% of a home and pay subsidised rent on the rest. Your mortgage only covers the share you buy, which means you need a far smaller deposit and benefit from lower monthly repayments.
Over time, you can incrementally increase your share in the property, so that you own more of your home. This is known as “staircasing”. It reduces your rent and allows you to work your way up to full ownership slowly.
Shared ownership properties are bought from housing associations, local councils, and other organisations. They are arranged by local Help to Buy agents.
The government recently made changes to the scheme to make it more affordable. Under the new model, buyers can start from as little as 10% ownership, whereas previously, you had to buy at least 25%.
You need a deposit and a lender who offers shared ownership mortgages. The minimum deposit required is usually 5% of the share you want to buy.
You need to pay rent on the remaining share, but this is set lower than market rates. The maximum you can be charged is 3% of the unsold share but some landlords charge less.
At the end of the mortgage, you would own your percentage share of the property outright (between 10 to 75%), and the housing association, council or landlord would own the rest.
You can choose to buy more shares of your home by “staircasing”. Every time you buy an extra chunk, your monthly rent will drop accordingly. You must buy any new shares at the current market rate, not the value when you first purchased the home.
New shared owners can buy additional shares in 1% increments for up to 15 years, with heavily reduced fees. It is possible to buy more of your home in larger increments, for instance in chunks of 10%, 15% and so on.
You’ll also need to factor in other fees before you buy. Housing associations recommend that you have between £3,000 and £5,000 available to cover all the costs of moving, which includes the surveys, solicitors and broker costs.
The savings you make will depend on the cost of the house and the size of the share you buy.
For example, if you want a property worth £200,000, you’d normally need a minimum 5% deposit worth £10,000 and a £190,000 mortgage.
However, if you are buying 25% of the home under shared ownership, you only need a deposit of £2,500 and a mortgage for £47,500. As the mortgage is smaller, the monthly repayments are more affordable.
Thanks to the 3% rent cap, you would expect to pay £375 per month in rent at most.
At the end of the mortgage, you’d own 25% of the property, and the housing association would own the rest. Alternatively, you could choose to staircase, buying extra shares along the way.
Because shared ownership is a government scheme, there are strict eligibility criteria. The first factor is income – to qualify, your household income must be less than £90,000 a year in London, or £80,000 anywhere else in the country.
You also need to demonstrate that you can’t afford the deposit and mortgage required for a home that meets your needs without a shared ownership scheme.
The government website also advises that one of the following must also be true:
You’re a first-time buyer
You used to own a home but cannot afford to buy one now
you’re forming a new household – for example, after a relationship breakdown
You’re an existing shared owner, and you want to move
You own a home and want to move but can't afford a new home that meets your needs
For some homes, you may have to show that you live, work, or have a connection to the area where you want to buy.
You are allowed to use the scheme to buy:
A new-build home
An existing home through a shared ownership resale scheme
A home that meets your specific needs, if you have a long-term disability – for example, a ground-floor flat
Scotland, Wales and Northern Ireland have different schemes with different rules. You can find out more through gov.uk.
Not all lenders offer shared ownership mortgages, but plenty do. Some offer specialist products, while bigger high street lenders tend to open up their first-time buyer mortgages to shared ownership applicants.
Providers will often ask for a lot of paperwork, so come prepared. They’ll also carry out stringent checks to make sure you can afford what you borrow.
The number of lenders available to you is determined by your financial circumstances. The higher your loan-to-value (LTV), the more options you’ll have and the better rates you can access.
A poor credit history will significantly limit the pool of potential providers. Speaking to a broker can help you find the best lender for your unique situation.
Speak to an expert mortgage broker who can compare mortgages to help find the best deal for your circumstances.
If you take out a mortgage to buy your share, you’ll need to make monthly repayments. These include the interest charged by the lender.
If you borrow extra money to purchase additional shares, your mortgage repayments will also go up. You may be able to remortgage to get a better deal.
This is the amount of cash you will need to pay towards buying your home. Deposits are typically 5% or more of the share of the property you buy. For example, if you bought 50% shared ownership of a £200,000 house, your share would be worth £100,000. A 5% deposit on this amount would be £5,000. However, the higher your deposit, the better the rates available to you, with the very best rates on offer to people with deposits worth 40% or more.
Getting a shared ownership mortgage and buying a house also comes with several other fees and costs that you will need to take into consideration.
For instance, you’ll need to factor in removals, legal fees, the cost of a surveyor, and potentially broker fees. Housing associations advise these could stack up to as much as £5,000.
First-time shared ownership buyers in England and Northern Ireland pay 0% stamp duty on the first £425,000 of any home that costs up to £625,000. You will need to pay 5% stamp duty on anything above that.
If your house is valued at more than £500,000, or you’re not a first-time buyer, you’ll pay more stamp duty. You pay 2% on the portion of your home between £120,000 and £250,000, 5% on the portion between £250,001 and £925,000, 10% on any portion between £925,001 and £1.5 million and 12% above that.
If you’re planning to staircase, you can pay all the stamp duty upfront, or do it in instalments.
The housing association will charge subsidised rent on the share of the property they own. The more of your property you buy yourself, the less rent you will pay. The maximum landlords in England can charge is 3%.
You can estimate costs by multiplying the value of their share by 0.03 which gives you annual repayments. To work out monthly payments divide by 12.
You’ll usually have to pay a service charge to the housing association which covers the services they provide. This includes things like maintenance and repairs, cleaning communal areas, gardening or ground upkeep, and the cost of management.
Sometimes the charge will vary from year to year, while other associations offer a fixed fee. Check your lease to make sure you understand the costs.
If you take out a mortgage to buy your share, you’ll need to make monthly repayments. These include the interest charged by the lender.
If you borrow extra money to purchase additional shares, your mortgage repayments will also go up. You may be able to remortgage to get a better deal.
This is the amount of cash you will need to pay towards buying your home. Deposits are typically 5% or more of the share of the property you buy. For example, if you bought 50% shared ownership of a £200,000 house, your share would be worth £100,000. A 5% deposit on this amount would be £5,000. However, the higher your deposit, the better the rates available to you, with the very best rates on offer to people with deposits worth 40% or more.
Getting a shared ownership mortgage and buying a house also comes with several other fees and costs that you will need to take into consideration.
For instance, you’ll need to factor in removals, legal fees, the cost of a surveyor, and potentially broker fees. Housing associations advise these could stack up to as much as £5,000.
First-time shared ownership buyers in England and Northern Ireland pay 0% stamp duty on the first £425,000 of any home that costs up to £625,000. You will need to pay 5% stamp duty on anything above that.
If your house is valued at more than £500,000, or you’re not a first-time buyer, you’ll pay more stamp duty. You pay 2% on the portion of your home between £120,000 and £250,000, 5% on the portion between £250,001 and £925,000, 10% on any portion between £925,001 and £1.5 million and 12% above that.
If you’re planning to staircase, you can pay all the stamp duty upfront, or do it in instalments.
The housing association will charge subsidised rent on the share of the property they own. The more of your property you buy yourself, the less rent you will pay. The maximum landlords in England can charge is 3%.
You can estimate costs by multiplying the value of their share by 0.03 which gives you annual repayments. To work out monthly payments divide by 12.
You’ll usually have to pay a service charge to the housing association which covers the services they provide. This includes things like maintenance and repairs, cleaning communal areas, gardening or ground upkeep, and the cost of management.
Sometimes the charge will vary from year to year, while other associations offer a fixed fee. Check your lease to make sure you understand the costs.
You can buy additional shares of your home, through staircasing. Each time you buy a new chunk, you will need to pay your housing association to carry out a mortgage valuation. The landlord may charge an administration fee if you buy a share of 5% or more – this can vary from around £150 to around £500.
The more you buy, the less rent you will pay, although your mortgage payments could go up if you need to borrow extra cash from a lender.
Different associations have different rules. For instance, some have limits on the total number of times you can buy extra chunks.
Some older leases only allow you to buy shares of 10%, 25% or more. However, new government rules mean if you bought your home after 2021 you may be able to buy 1% extra of the house at a time.
Before you buy a shared ownership home, ask the landlord for the ‘key information document’ to check the rules around what shares you can buy and when.
Shared ownership lets you take out a mortgage to buy a share of a property – usually between 10% and 75%
You pay rent to a housing association on the share you do not own
Each month, you repay capital and interest to the mortgage lender
The amount you owe is fixed, based on how much you’ve borrowed from the lender
At the end of the mortgage, you only own a share of the property, although you can use staircasing to buy the house outright
Shared equity lets you borrow additional money to count towards your deposit
This loan (alongside deposit savings) is then used to take out your mortgage, meaning you have two loans at once
The loan is either paid back in instalments over a set time period or once the property is sold
The amount you owe is a percentage of the house value, so fluctuates if the price goes up or down
You own the whole of the house, you just have an extra loan alongside your mortgage
There are four steps to applying to a shared ownership scheme.
First, you must register with the Help to Buy agent wherever you want to live. Once you’ve done that, you can complete a shared ownership application form, which takes about 10 minutes. The association will confirm if you’re eligible for the scheme.
Once the association has confirmed you qualify, start looking at houses. When you find one you like, register your interest by contacting the landlord.
You’ll then be passed to a mortgage adviser who will assess your salary, income and outgoings to see if you are likely to pass affordability checks. This will let you know what share you’ll be able to buy. You should find and confirm a lender at this stage.
If you meet the affordability checks, you can reserve your chosen home for a fee of up to £500. This will be deducted from the final amount you pay to complete – but you usually don’t get a refund if you pull out.
Finally, engage a lawyer to handle the sale. They’ll explain the terms of the lease to you, and make sure conveyancing is done correctly.
If you’re in Wales, Scotland or Northern Ireland, the rules and processes are different. You can find out more here:
Northern Ireland: Co-ownership
Scotland: Shared ownership
Wales: Shared ownership
Part-buy, part-rent and part-ownership mortgages are all alternative names for shared ownership.
Yes, a mortgage broker could help you find suitable deals from shared ownership mortgage lenders. They will look at your financial circumstances and compare the interest rates offered across the market to get you the best offer possible.
It can be more difficult to sell a shared ownership property. Your housing association usually has first refusal to buy the property back from you and will also set the price.
In England, you can buy a new-build home, an existing home through a shared ownership resale scheme or a home that meets your specific needs, if you have a long-term disability.
Other parts of the UK have different rules, including caps on the total value of the properties available. Learn more about shared ownership in Wales and Scotland, and FairShare in Northern Ireland.
Usually, you will need at least a 5% deposit to get a traditional mortgage. With shared ownership, you only need 5% of the share you intend to purchase. For instance, on a £200,000 house, you would need:
£10,000 with a traditional mortgage
£2,500 for a 25% shared ownership share
£5,000 for a 50% share
£7,500 for a 75% share
First-time Shared Ownership buyers won’t have to pay Stamp Duty on the first £300,000 of any home that costs up to £500,000. But stamp duty will apply to anything above that. If you’re planning to buy extra shares in the property, you can choose to pay the stamp duty upfront or as you go.
If you’re not a first-time buyer, or you want to buy a home worth over £500,000, you’ll have to pay full stamp duty. Use a stamp duty calculator to see what you would owe.
You can paint, decorate or refurbish a shared ownership home, but you’ll have to foot the bill. You might need written permission from your landlord to make structural changes.
Use the links below to find out about other mortgages
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