Shared Ownership Mortgages

Shared ownership is a part-buy, part-rent scheme backed by the government and designed to help people who don’t have a large enough deposit or high enough income to purchase a home at its full market value. 

In this guide, we’ll walk you through how it works, who qualifies and how to get one. 

How Shared Ownership Works

Rather than paying the full purchase price of a property, shared ownership allows you to buy just a portion and pay rent on the rest. Typically, you'll purchase between 25% and 75% of the home, using a mortgage to pay for your share. The remaining share is owned by a housing association or developer to whom you’ll pay a subsidised monthly rent. 

It's an ideal solution for people who can afford monthly mortgage repayments but can’t quite stretch to full ownership just yet. Over time, you can buy more shares in your property through a process called staircasing, and eventually own the property outright if you choose.

One of the key benefits of shared ownership is that the mortgage deposit required by lenders is based on the share you’re buying rather than the full market value of the property. 

The table below offers examples of how Shared Ownership works in practice.

*The minimum deposit required will vary from lender to lender. The figures used here are for illustrative purposes only. 

**Most housing associations and landlords use 2.75% of the remaining share as a basis for the annual rent, which is paid monthly (the maximum cap is 3%). 

What Is Staircasing?

Staircasing is the process of buying additional shares in your home from the housing association or landlord. Each ‘step’ is usually worth 10% and as you move up the staircase, your monthly rent goes down and your mortgage payment goes up.  Once you hit 100%, you’ll own your property outright, and rent payments will stop altogether. 

When staircasing, every step will mean a new mortgage application or an amendment to your existing one (if you’re borrowing more to buy more shares). Some lenders allow you to borrow more on top of your current mortgage, or it might be more advantageous to look at a full remortgage.

You’ll also need a new property valuation each time by a qualified surveyor, which means incurring additional costs and legal fees. 

Who Qualifies for Shared Ownership?

The Shared Ownership scheme is primarily aimed at first-time buyers, those who previously owned but now can’t afford to buy again, and key workers such as teachers, NHS staff, and emergency service employees. It’s also available to households earning less than £80,000 a year (or £90,000 in London).

You need to register for the scheme first before you can apply for a mortgage. All applicants must be at least 18 years old. In addition to key workers, priority may also be given to anyone with specific housing needs (such as someone with a long-term disability). 

What Properties Are Available?

Shared ownership homes are typically new builds developed by housing associations or private developers, but resale shared ownership homes are also available. These are properties that were previously owned under the scheme and are now being sold on.

Most shared ownership properties are leasehold, meaning you’re leasing the property from the housing association for a fixed term (often 99 or 125 years). The lease sets out your rights and responsibilities, including limitations on making alterations, subletting, and keeping pets. So, it’s important to look through the lease document before you proceed. 

In some cases, especially with houses, you may be able to convert the leasehold into freehold after reaching 100% ownership. However, this depends on the property and terms of the lease.

It’s also worth noting that, in addition to your mortgage and rent, you may also need to pay service charges, ground rent, and maintenance fees, especially in flats or developments with communal areas.

How Much Can You Borrow?

The amount you can borrow depends on your financial situation (income and outgoings), the value of the share you’re buying, and the lender’s criteria. Since you’re only buying a share, the required mortgage and your deposit will be lower than for a full purchase.

For example, if you're buying 50% of a £240,000 home, your combined mortgage and deposit would be £120,000. With a 5% deposit, you’d only need to put down £6,000 and your mortgage would be £114,000. This makes the scheme more accessible for buyers who can’t save a large lump sum upfront as a deposit.

Most mainstream lenders that offer these types of mortgages have dedicated shared ownership products, while others offer specialist lending criteria. Working with a mortgage broker who understands shared ownership (like us!) can help you find the best deal and navigate any restrictions from lenders or housing associations.

How to Get a Shared Ownership Mortgage

There are three key steps you need to take to secure a shared ownership mortgage.

1. Check your eligibility and apply for the scheme. Contact the local housing association and/or a local estate agent who deals with shared ownership properties in the area you want to buy. Once you’ve found a suitable, qualifying property, check all the lease terms and conditions with the landlord. Secure the property with a non-refundable reservation fee while you arrange your mortgage and all the conveyancing work to be completed. 

2. Save for your deposit. Remember, the deposit you’ll need is based on the share of the property you’re buying, not its full value. Most lenders will require at least 5% to 10% as a mortgage deposit. The more you save, the less you’ll need to borrow, and your mortgage repayments will be lower. 

3. Speak to an expert (like us!). An experienced adviser who knows what mortgage lenders will look for with shared ownership applicants could make all the difference between getting accepted or rejected. They’ll be able to identify the right lenders offering the most competitive deals and make sure your application is prepared properly with all the necessary documentation. 

Is Shared Ownership the Right Choice?

Whilst the Shared Ownership scheme has several clear benefits, it’s not without its downsides, and it’s important to understand both sides before committing.

Advantages

• Shared ownership allows buyers to get a foot on the property ladder with a smaller deposit and lower monthly repayments than buying outright. 

• It’s very flexible, and you can increase your ownership share over time through staircasing. 

• Many homes in the scheme are new builds, meaning they’re energy-efficient and low-maintenance.

Drawbacks

• You’ll be paying both a mortgage and rent each month, which can add up. 

• Many properties are leasehold with restrictions on alterations or subletting. 

• There are additional costs for staircasing, and service charges are common (sometimes quite high in new developments). 

• Selling your share can also be more complicated, as you may need to give the housing association first refusal.

If shared ownership doesn’t feel like the right fit for you, there are other mortgage schemes available, such as the First Homes Scheme, which offers new-build homes at an attractive discount (usually at least 30%) for first-time buyers and key workers. 

Alternatively, if you’re travelling solo on your homeownership journey, you could also consider buying a home with a partner, close friend or family member using a joint mortgage. This way allows you to share the load, and you can use your joint income to cover the amount you need to borrow and the monthly repayments.