Shared ownership is a scheme where a buyer purchases a share of a property, usually between 25% and 75%, and pays rent on the remaining share owned by a housing provider. It lowers the deposit and mortgage needed compared with buying outright.
In one line: Shared ownership lets a buyer own part of a home and pay rent on the rest to a housing provider.
How shared ownership works
The buyer takes a mortgage on their share and pays subsidised rent on the part still owned by the housing association. Many buyers later increase their share through a process called staircasing.
On a 200,000 GBP home, buying a 40% share costs 80,000 GBP, needing a mortgage and deposit on that amount rather than the full price. Rent is then charged on the remaining 120,000 GBP share, plus any service charge.
Staircasing up to 100% ends the rent, though each step usually involves a fresh valuation and legal costs.
Shared ownership vs full ownership
Shared ownership splits the home between buyer and provider, combining a mortgage with rent on the unowned share. Full ownership means holding all the equity, with no rent payable to anyone.
Most shared ownership homes are leasehold, so a service charge and lease terms also apply.
Primary source: GOV.UK: Shared ownership homes