How does Shared Ownership work?

Shared ownership buyer amidst moving boxes

With property prices rising across the UK, the path to buying your own home can be a difficult one. Affordable home ownership schemes like shared ownership are a useful alternative to simply renting until you can afford a hefty deposit, as our guide explains. Read on, and find out how shared ownership works, its pros and cons, and how it can help you.

What is shared ownership?

Shared ownership is an affordable home ownership scheme designed to help buyers who can’t secure a conventional mortgage and deposit. It’s a UK Government-backed scheme run by various housing associations. The UK government scheme is only available in England, while the Welsh and Scottish governments run similar schemes.

How does shared ownership work?

Shared ownership works by allowing you to buy a share of your home, while paying rent on the remaining share. This initial share can be as little as 10% of the value of the property. Then, little by little, you buy additional shares whenever you can afford to.

Do you need a deposit for shared ownership?

Yes, you still need a deposit to buy a home through the shared ownership scheme. However, you only need to pay a minimum of 5% on the initial share, not the full value of the property.

For example, if you wanted to buy a house worth £200,000 through a regular mortgage, you would probably need at least a £10,000 (5%) deposit. With the shared ownership approach, you could buy an initial minimum share of 10% of the property and only need a deposit of £1,000 – i.e.: a 5% deposit on the 10% share. Then the remaining £19,000 you could secure through a shared ownership mortgage.

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Is shared ownership only for first-time buyers?

The shared ownership scheme is mostly aimed at first-time buyers, but not exclusively. Anyone who meets the shared ownership eligibility criteria can use the scheme.

What is the minimum income for shared ownership?

There is no set minimum income needed to be entitled to buy your home through shared ownership. The housing association that owns the property will value it and decide on the minimum monthly income level required.

How long does the shared ownership process take?

Buying a property through shared ownership usually takes an average of around two months. However, the process could be completed within as little as 28 days if there are no complications. This is much quicker than the UK average of around four months needed to buy a property.

What are the advantages of shared ownership?

The main advantage of shared ownership is that it allows you to get onto the property ladder with a much smaller deposit. Then, instead of fully renting your home until you can secure a conventional mortgage, you can slowly purchase your home a small piece at a time.

Other benefits of shared ownership include the following:

  • With most properties, you can keep buying more shares up to 100% of the property’s value. You then become the full owner.
  • You can sell shares you own back to the housing association at any time.
  • Rental rates on shared ownership properties (i.e.: the part you don’t own) are usually cheaper than local market rates.

What are the disadvantages of shared ownership?

The main disadvantage of shared ownership is that there are some restrictions on what you can do with the property since it is part-owned by the housing association. You will have to get permission to do most home improvements beyond internal decorating.

Also, all shared ownership properties are leasehold. This means that you have to pay 100% of the ground rent and service charge on your property. This remains the same no matter how big or small your share is.   

How is rent calculated on shared ownership?

The amount of annual rent charged for shared ownership properties is usually calculated at 3% of the share amount still owned by the housing association. So, if you own 10% of a £200,000 shared ownership property, the housing association would likely charge you rent of £5,400 annually. This would be £450 per month.

In any case, you will be given full details of your expected rent charges before you buy.

Which UK banks do shared ownership mortgages?

Many UK banks will offer shared ownership mortgages, but not all of them. In October 2022, major banks that offer shared ownership mortgages include Barclays, Lloyds Bank and Halifax.

woman researching on laptop

Is shared ownership worth it?

If you are looking to start building up equity in your home, but can’t afford a conventional mortgage product, then shared ownership is a viable alternative. Buying small shares over time can make homeownership affordable, and your monthly rental payments will probably be lower than if you rented privately.

The shared ownership scheme is very flexible, even more so after its recent rules changes. This means you can approach homeownership on terms that suit your finances.

Is shared ownership better than renting?

Shared ownership does offer several advantages to traditional renting. You own a stake in the property and you can increase your stake over time. This means your money goes towards something tangible rather than all of it disappearing into a landlord’s pockets.

The downside is that you still pay rent as a shared owner, just that it’s only for the part of the property that you don’t own. You’re also liable to pay the full service charge for the property, regardless of your share of ownership.

Is it difficult to sell a shared ownership property?

You can sell a shared ownership property in much the same way as you sell a standard property, with just a few caveats. There are restrictions to ensure you sell the property to someone in need of affordable housing. You also need to notify your housing association of your intention to sell, so they can go through all the necessary processes. It’s also possible to sell some or all of your shares in your home back to your housing association.

Can my shared ownership rent increase?

As you increase your ownership of the property, your rent should go down, but rental prices can go up in line with market rates. In 2023, the government introduced measures to limit rent rises in shared ownership properties in accordance with the Consumer Price Index, plus 1%. Landlords can only increase rent within these parameters, and a maximum of once a year.

Are they stopping shared ownership?

The current plan from the UK Government is to keep the shared ownership scheme going until at least 2026. With the current turmoil in the UK housing market and politics in general, more Shared Ownership changes may occur soon. Check back soon for further updates.


If you need to know more about help-to-buy schemes, leasehold vs freehold or technical terms like loan to value, our guides below are a great place to start.

Read more

HomeViews provides verified resident reviews of the UK’s housing developments. We’re working with developers, house builders, operators, housing associations and the Government to recognise high performers and help improve standards in the built environment.

written by

Jan Moys

A residential property expert with over 15 years’ experience creating content... Read all

A residential property expert with ov... Read all