Last reviewed: June 2026
TL;DR- Shared ownership allows purchase of a share between 10% and 75% of a property, with rent paid on the remainder to the housing association.
- A mortgage is taken on the purchased share only - the deposit and mortgage required are substantially lower than for full market purchase.
- Eligibility is based on household income limits - currently £80,000 per year outside London and £90,000 in London for most schemes.
- Staircasing allows gradual purchase of additional shares up to 100%, though not all shared ownership leases allow full 100% staircasing.
How Shared Ownership Works
Shared ownership is a government-backed affordable home ownership scheme administered through registered providers (housing associations). Buyers purchase a share of a property - typically between 10% and 75% of the full market value - and pay rent at a subsidised rate on the remaining share that continues to be owned by the housing association. A deposit of 5-10% of the purchased share is typically required, substantially reducing the upfront capital needed compared with full market purchase.
The scheme is intended to bridge the gap between renting and full home ownership for buyers who can afford mortgage payments and rent combined but cannot fund the full purchase price and deposit for outright ownership.
Eligibility Criteria
Shared ownership eligibility is set by the government and individual registered providers. The key criteria include:
- Household income: typically £80,000 per year or less outside London; £90,000 per year or less in London. Some specific scheme types have different caps.
- Priority: first time buyers, existing shared owners looking to move, and those who previously owned a home but can no longer afford to do so are typically given priority.
- Residency and right to buy: applicants must typically live or work in the area where the property is located, or in England for nationally marketed schemes.
- Military personnel may be given national priority regardless of location.
Properties must be new build or resale shared ownership properties that are part of the scheme - existing private market properties cannot be purchased under shared ownership.
Shared Ownership Mortgage Assessment
Shared ownership mortgages are specialist products offered by a limited range of lenders. Affordability is assessed on the combined monthly cost of the mortgage payment on the purchased share plus the rent on the unpurchased share plus service charges. Lenders apply the same FCA MCOB affordability rules as for standard residential mortgages, using a stressed interest rate in the assessment.
The limited number of lenders offering shared ownership products and the combined payment structure mean that the maximum loan available may be lower than for an equivalent full market purchase. A whole-of-market mortgage broker with experience in shared ownership can identify lenders with the most favourable criteria for specific circumstances.
Staircasing: Buying Additional Shares
Staircasing is the process of purchasing additional shares of the property over time, gradually increasing the owned percentage up to a maximum of 100% in most cases. Under the government's updated shared ownership model introduced from April 2021, buyers can staircase in increments as small as 1%, compared with the previous minimum of 10% tranches. Each staircasing transaction involves a new valuation of the property at market value, a solicitor's fee and potentially stamp duty.
Stamp duty land tax on shared ownership purchases can be paid in stages or as a one-off payment on the full market value at the point of first purchase. Buyers should take advice on the most cost-effective approach. Once 80% of the property is owned, no further rent is payable on the remaining share in many shared ownership lease structures - buyers should check the specific lease terms.
Service Charges and Lease Terms
Shared ownership properties are leasehold. Buyers pay service charges to the housing association for maintenance of communal areas and building management, in addition to the mortgage payment and rent. Service charges vary significantly between developments and can increase over time. The lease will specify the length of the term and the permitted uses of the property. Shared ownership leaseholders have the right to carry out certain improvements with the landlord's consent, though the treatment of improvements at the point of sale or staircasing varies by lease.
Frequently Asked Questions
Can I sell a shared ownership property?
Yes. Shared ownership properties can be sold, but the housing association typically has a right of first refusal to find a buyer for a defined period - usually 8 weeks. If the housing association cannot find a buyer in that period, the owner can sell on the open market. The buyer of a shared ownership resale must meet the scheme's eligibility criteria unless the seller owns 100% of the property.
What happens to the rent on the unpurchased share?
Rent on the unpurchased share is set by the housing association and is typically capped at a percentage of the property's market value - commonly 3% per year. Rent is reviewed annually, usually in line with the Retail Prices Index (RPI) plus a small percentage, as specified in the lease. Buyers should review the rent review mechanism carefully before purchasing, as rent increases over time affect the overall affordability of the arrangement.
Is shared ownership the same as Help to Buy?
No. Shared ownership and Help to Buy are separate government-backed schemes. Help to Buy was an equity loan scheme that provided a government loan toward the purchase of a new build property, allowing buyers to purchase 100% of the property with a smaller mortgage and deposit. The main Help to Buy equity loan scheme in England closed to new applications in March 2023. Shared ownership involves part-purchase and part-rent and remains open to new applicants through registered providers.
Can I make home improvements on a shared ownership property?
Shared ownership leaseholders can make improvements to the property with the housing association's consent, as specified in the lease. The treatment of improvements at the point of staircasing or sale varies - some leases exclude the value of improvements from the valuation used for staircasing, which benefits the buyer; others include improvements in the valuation. The specific lease terms should be reviewed before committing to any significant improvement expenditure.
