Shared Ownership – how it works and what the costs are

With thanks to Aaron Strutt and Richard Forgione of Trinity Financial and Ray Boulger of John Charcol for their contributions to this guide.

Shared Ownership: 17 need-to-knows

More than 250,000 households live in Shared Ownership homes, with the number growing.

Here's how Shared Ownership works and our top tips:

1. It's NOT limited to first-time buyers

   

   Shared Ownership is not just available to first-time buyers.
   
   It's also open to previous homeowners struggling to get back on the property ladder, homemovers and people already living in Shared Ownership.

   To buy via Shared Ownership, your total income needs to be less than £80,000 a year (£90,000 a year if buying in London). So that means:

   - Sole buyers can't have an individual income greater than £80,000 a year.
   - Joint buyers can't have a joint income greater than £80,000 a year.

   While exact eligibility criteria varies by property and area, you'll need to show you're unable to buy a suitable home on the open market. You'll also need a good credit history and not be in mortgage or rent arrears.

2. You won't own 100% of your home (not initially)

   Shared Ownership is designed to help homebuyers who can't afford a property at full market value get on to the housing ladder by buying a part of one instead.

   There are some restrictions though:

   • The minimum initial share you can buy is typically 25%. Though with some properties it can be as little as 10%. It tends to be higher with resale properties.

   • The maximum initial share you can buy is typically 75%.

   So a 25% share of a £300,000 property would be £75,000, while a 75% share of the same property would be £225,000.

   Minimum and maximum shares vary, depending on the property and where you're looking to buy. An assessment of your financial circumstances – carried out by the Shared Ownership organisation – might also impact what size share you can buy.

   Most homebuyers start with a 20-30% share, the Shared Ownership Council says.

3. A deposit will normally be required – though it's based on the share you're buying

   You'll need to put down a deposit. However, this is based on the share you're buying and not the whole property price. 

   A property advertisement should state the minimum deposit required. Typically it'll be between 5% and 10%. So if you're buying a share of a £300,000 property worth 25% (so £75,000), a 10% deposit would be equivalent to £7,500.

   The bigger deposit put down, the smaller mortgage you'll need. This means better interest rates, which in turn mean a cheaper mortgage – see loan-to-value help.

   You might still be able to buy through Shared Ownership even without a deposit, as Skipton Building Society offers a no-deposit, 100% mortgage – though you'd need a Shared Ownership property which doesn't require a deposit (most do).

4. Know how to find Shared Ownership properties

   

   Shared Ownership properties are available across England, though some areas have more of them (such as London and the South East).

   You'll need to establish which providers offer Shared Ownership homes in your area.

   - England (excluding London)

   Enter your details into Gov.uk to see which providers offer Shared Ownership homes in the area you want to buy. Contact the relevant provider, which'll check your eligibility and affordability and share details of properties for sale.

   - London

   Use Homes for Londoners to see Shared Ownership homes for sale in your area. You can browse properties without registering, but need to do so if you want to buy one. Your details will be sent to the relevant housing provider for eligibility checks.

5. You'll have to pass an affordability assessment

   You'll need to pass an affordability assessment to take part in Shared Ownership.

   This is to check you meet the eligibility criteria and, importantly, could afford the costs involved. So be prepared to share details of your incomings and outgoings.

   The assessment will be arranged by the housing developer and is likely to be carried out by one of its partner mortgage brokers or financial advisers.

   While you you can't choose who carries out the assessment, if it's a broker you don't have to use the same one again when you later come to apply for your mortgage. The choice of mortgage broker is yours – though of course it may simply be more convenient to use the one who did your assessment.

6. You'll need to be accepted for a mortgage

   Once you've passed the Shared Ownership eligibility and affordability checks and reserved a property, it's time to apply for a mortgage.

   If you're not sure whether a lender would lend to you, you could apply for a mortgage agreement in principle beforehand to get some reassurance.

   The size mortgage you'll need will be equivalent to the value of the share you're buying, minus the amount you've got as a deposit. Here's an example:

   • You buy a 25% share of a £300,000 property. Equivalent to £75,000.

   • You put down a 10% deposit. This means stumping up £7,500.

   • You'd need a mortgage on the other 90%. So you'd need to borrow £67,500.

   Mortgages for Shared Ownership homes are typically more expensive than normal mortgages. That's partly because lenders see Shared Ownership homes as more risky (some lenders won't even lend on Shared Ownership).

   Smaller building societies tend to offer the greatest number of Shared Ownership mortgages. To find out which lenders offer them, speak with a mortgage broker – preferably one with experience of Shared Ownership. 

   The mortgage checks you'll need to pass

   When assessing your affordability lenders will carry out rigorous checks, checking:

   - Your salary
   - Any debts you have
   - Your spending habits
   - Any faults or red flags on your credit file
   - Just for Shared Ownership: How much rent you'll be paying
   - Just for Shared Ownership: How much you'll be paying in service charges

   Should I use the developer's in-house mortgage broker?

   Which broker to use (if any) when getting a mortgage is your decision.

   A housing developer might encourage you to use its in-house mortgage broker or conveyancing solicitor. There's nothing wrong with this.

   But some developers and estate agents can be really pushy about using their in-house services, sometimes bordering on what's known as 'conditional selling' – a practice that's strictly against the rules.

   See our Conditional selling guide for more on what it is and your rights if a developer pressures you to use its in-house services.

   Close

7. You'll pay rent on the share you don't own – and this can be expensive

   The share of the property you don't buy will be owned by a landlord (either a housing association, local authority or building developer). So if you buy a 60% share, typically the landlord will own the other 40%.

   You'll pay rent on the share you don't own – and this can be expensive. While the rate varies by property and area, it's typically around 2.75% (a property advert should state how much it is). Here's how it works:

   If you buy a share of a £400,000 property worth 40% and pay 2.75% rent on the 60% (£240,000) you don't own, the rent would cost circa £550/mth (£6,600/yr).

   Or if you buy a share of a £200,000 property worth 40% and pay 2.75% rent on the 60% (£120,000) you don't own, the rent would cost circa £275/mth (£3,300/yr).

   The rent is ON TOP of your monthly mortgage repayments. Plus, you'll likely have to pay a service charge. This means your monthly costs can quickly escalate. 

   Be aware the rate of rent can increase. Though if you buy more shares in your home (known as staircasing) then the amount of rent you pay will decrease. And if you reach 100% ownership, you'll stop being charged rent altogether.

8. Shared Ownership homes are always leasehold

   

   In England, properties are either freehold or leasehold. But when it comes to Shared Ownership, the properties available are always leasehold.

   Leasehold properties differ to freehold properties in some very important ways. In brief:

   • With leasehold you own the property but not the land it stands on. If the property was freehold on the other hand, you'd also own the land it stands on. 

   • Ownership of a leasehold property is for a defined period. For example, 90 years. This is because, technically, a leaseholder actually owns a lease, permitting them to occupy the property (leases sometimes need extending too, which can cost £1,000s). With freehold, you own the property indefinitely.

   See our Leasehold versus freehold guide for a full explanation of the differences.

9. Watch out for the service charge – it can be expensive and will likely increase over time

   One of the other major costs of owning a Shared Ownership home is the service charge (sometimes referred to as a maintenance charge).

   This goes towards the upkeep of communal areas like hallways and gardens. It's normally paid monthly and can set you back £100s, or even £1,000s, a year. Service charges typically increase with time too, sometimes significantly – something many homeowners don't realise when first buying their home.
   
   A property listing should make clear how much the service charge will be. It's also important that you establish who you'll pay the service charge to, in case you ever want to challenge the amount or complain about the level of service.

   Other costs to consider

   There are a number of other costs to be aware of. You may have to pay some, all or none of these (or they may be included within the service charge).

   Ask the developer if you'll pay these and if they're separate to the service charge:

   💰 Buildings insurance. To cover damage to the structure of the building.
   
   💰 Reserve (sinking) fund. Typically for unexpected damage or repair costs.
   
   💰 Management fee. Towards the firm managing the building or estate.
   
   💰 Estate fee. If you live on a new-build estate, such a fee may apply.
   
   💰 Ground rent. Far less common these days because of a ground rent ban, this is normally an annual fee paid to the freeholder (every leasehold property has someone who owns the property's freehold). Ground rent might be a nominal amount, or it might be £100 or even £250 a year.

10. It's mainly new-build homes that are available

    Shared Ownership homes tend to be new-build properties. Some have been lived in before (known as resales), but most haven't – a property listing should say.

    Different property types are available, though mainly it's houses, flats and apartments (in 2023/24, around 65% of Shared Ownership sales were houses). Bungalows and maisonettes are less common through the scheme.

    You're unlikely to find a period property through Shared Ownership.

11. You can buy extra shares in your property – all the way up to 100% ownership

    

    You've got the opportunity to buy extra shares in your home after you've become the owner. For example, if you can afford it you might decide to increase your ownership from 25% to 50%, or from 75% to 100%. This process is known as staircasing.

    If you reach 100% ownership you'll no longer have to pay rent on unowned shares.

    The minimum you can increase ownership by tends to vary:

    • The smallest amount is typically 10%. Though increasingly it's possible to staircase by just 5% (with older homes, the minimum can be nearer to 25%).
      
      If buying a share of 5% or more, you'll need to pay for a share valuation, plus there'll likely be legal and administrative costs too, which, taken together, can make staircasing expensive. If you've not got the money upfront, you'll need to think of other ways to finance staircasing – such as by remortgaging.

    • In some cases you can increase your share by as little as 1%. This is more likely to be available on newer properties. You won't need a share valuation, but there will likely be certain fees (such as an admin fee).

    The typical costs associated with buying a share worth 5% of share or more are between £800 and £2,500, according to the National Audit office – and this doesn't take into account the cost of the share itself (which is based on property prices).

    See Gov.uk for more information about the rules around staircasing.

    Important. Some landlords limit how many times you can staircase. For instance, some cap staircasing at three times, while others only allow staircasing for a third time if it increases ownership to 100%. Check with the landlord what its rules are, including how much it costs to staircase.

12. You're responsible for repairs – but you may not have to pay for it (depending on what's wrong)

    

    While you'll only own a share of your home, you'll be the one responsible for maintenance and repairs – though you may not ultimately have to cover the cost, depending on what the issue is.

    With new properties, any snagging issues should be covered by the builder, while serious structural issues are normally covered by the warranty (for its duration). Before reserving a Shared Ownership home, it's important that you check the warranty details.

    Separately, with Shared Ownership homes built since 2021, the cost of essential structural repairs should be met by the landlord during the first 10 years of home ownership (if the warranty doesn't cover it). Plus, you can also claim some repair costs for up to £500 a year (like for a broken boiler). See Gov.uk for how it works.

    Any other types of repair will be your responsibility to arrange and pay for.

13. You'll need to pay Stamp Duty – and the process requires more thought than usual

    Stamp Duty is more complicated when it comes to Shared Ownership. That's because you need to decide between:

    • Option 1. Paying Stamp Duty on the ENTIRE property. Or...

    • Option 2. Paying Stamp Duty on the SHARE you're buying.

    With option one, while you'll likely pay more Stamp Duty upfront, you won't have to worry about paying it again if you staircase in future.

    With option two, while you'll likely pay less Stamp Duty upfront, if you staircase in future you might have to pay Stamp Duty again (and that portion of Stamp Duty could be more expensive that the first if property prices have since increased). 

    Here are some things to consider before deciding:

    Do you even pass the threshold to pay Stamp Duty?

    In England and Northern Ireland, first-time buyers don't pay Stamp Duty on the first £300,000 of a property (if you're not a first-time buyer, it's the first £125,000).

    So you may not even have to pay Stamp Duty if the property you're buying doesn't pass these thresholds. See our Stamp Duty guide for more about the thresholds.

    Unlikely to staircase up to 80%? Stamp Duty on the share is probably best

    If you pay Stamp Duty on the share, you'll only pay Stamp Duty again if you staircase to 80% ownership of the property or above.
    
    For example, if you bought an extra share which took your ownership to 75%, you wouldn't need to pay Stamp Duty again, but you would if your ownership reached 80% (and on anything between 80% and 100% ownership).

    Likely to staircase up to 80%? It's a gamble which option is best

    You could pay Stamp Duty on the whole property – here, from the start, you know exactly how much Stamp Duty you'll pay overall (and won't have to pay it again). But it's a risk if you're not guaranteed to staircase to 100% ownership (as you might pay more Stamp Duty than is necessary).
    
    If you pay Stamp Duty on the share, you might pay less upfront but you'll need to pay Stamp Duty again if you staircase to at least 80% ownership. And Stamp Duty might be more expensive second time around if property prices have increased since you first bought your home (higher property prices mean more Stamp Duty).

    See Gov.uk for more on how Stamp Duty works in relation to Shared Ownership.

14. Selling a Shared Ownership home can be complex

    

    Selling your home can be complicated (unless you've staircased to 100% ownership, which can make it easier).

    It typically involves the following steps:

    • Step 1. Giving notice to your landlord of your intention to sell. You might have to do this even if you own 100% of your home (check the rules if unsure).

    • Step 2. The landlord typically having first refusal. So the landlord has the right at first to try and sell your share, normally to a Shared Ownership buyer.

    • Step 3. You trying to sell the share yourself if the landlord is unable to find a buyer. You'll be able to advertise the property on the open market or via an estate agent, though you'll likely be restricted to selling your share to someone who wants to buy through Shared Ownership.

    The exact process varies by landlord, so it's worth asking what steps are involved and whether there are any selling restrictions. Normally your share can't be sold for less than what it's valued, but can be sold for more.

    If you're really struggling to find someone to buy your share, you might be given permission to sell the property as a whole (in other words, not as a Shared Ownership home). However, this is where selling can become really complicated.

    See Gov.uk for more information on selling a Shared Ownership home.

    What fees are involved when selling a Shared Ownership home?

    To get a sense of what's involved when selling a home, see our How to sell your home guide. If your landlord helps you sell, you might pay:

    💰 Marketing fee – £350ish. To cover the landlord's advertising costs.

    💰 Valuation fee – £250ish but can be significantly more. As your property will need to be valued by a surveyor organised by the landlord.

    💰 Legal fees – circa £1,500. You'll need to cover your own legal fees and any incurred by the landlord.

    💰 Energy Performance Certificate – £50 to £100. This shows the energy efficiency of your property.

    The landlord should provide a clear breakdown of the likely fees payable.

15. You can complain if you're unhappy

    If you're unhappy about your Shared Ownership home then you can complain.

    In the first instance, you should complain directly to your landlord or the developer/builder. Many complaints will sit with your landlord, though those concerning a new-build home – specifically its condition and structure – are more likely to sit with the builder or developer.

    Where it can't resolve your complaint, you should be able to escalate the dispute for free, though the exact route will depend on what the complaint is about:

    Complaints about builders, developers and new-build homes

    The New Homes Ombudsman Service and the Independent Dispute Resolution Scheme are the two bodies that look into complaints about housing developers, builders and – by extension – the quality of the homes they build.

    See our Buying a new-build home guide for more on escalating a complaint.

    Service charge complaints

    In the first instance, try and sort service charge issues (such as the cost) directly with the landlord. If the issue remains unresolved, then there are other routes you can take, such as applying to the First-tier Tribunal.

    See the Leasehold Advisory Service for info on how to challenge a service charge.

    All other complaints

    If your complaint isn't about a service charge, builder or the quality of a new-build home, you'll likely need to take your complaint to the Housing Ombudsman.

    The types of complaints it can look into include:

    Complaint handling; property condition; estate management; anti-social behaviour; buying or selling a property; health and safety and more.

16. Different schemes are available for older people and those with disabilities

    Different Shared Ownership schemes are available to older people and those with long-term disabilities (you can use the main scheme, if you'd rather).

    Here's how they work:

    Older Persons Shared Ownership

    For those aged 55+, you can buy up to 75% of your home. After 75% ownership, there is no rent to pay on what you don't own. See Gov.uk for more info.

    Home Ownership for People with Long-Term Disabilities (HOLD)

    Available if other Shared Ownership properties don't meet your needs – for example, you need a ground-floor property. See Gov.uk for more info.

17. Free advice is available for homeowners

    If you already own a Shared Ownership home and you've got questions about leasehold, your lease or the service charge you pay (such as how to dispute a service charge), a good starting resource is the Leasehold Advisory Service (LAS).

    A free, government-funded service, the Leasehold Advisory Service has a wealth of information on its website about these topics. Plus, it can offer free initial legal advice, either via email or by telephone appointment – see the LAS website.
    

Shared Ownership FAQs