Shared Ownership UK
Mortgages, Eligibility, Costs and How It Works
Shared Ownership can reduce the mortgage and deposit needed to buy a home by allowing you to purchase a share and pay rent on the remainder. It can be a practical route when buying outright is not affordable, but the real decision depends on the full monthly cost.
This guide explains shared ownership mortgages, eligibility, deposits, rent, service charges, staircasing and resale so you can assess the arrangement before reserving a property.
Clear guidance. FCA-regulated mortgage advice. No guaranteed outcomes.
Mortgage on Your Share
Arrange a residential mortgage against the percentage of the property you purchase.
Rent on the Remaining Share
Pay rent to the housing provider on the percentage you do not yet own.
Service Charge
Budget for service charges, insurance contributions, repairs and other property costs.
What Is Shared Ownership?
Shared Ownership is a part-buy, part-rent arrangement. You buy a percentage of a home using a deposit and usually a mortgage, while a housing association or another provider retains the remaining share.
You live in the whole property, but the lease sets out the percentage you own, the rent payable on the remainder and the rules for buying further shares.
Your deposit is normally calculated against the value of the share you purchase rather than the full property price. This can reduce the cash and mortgage required at the beginning, although it does not remove rent, service charges or repair responsibilities.
Who Is Eligible for Shared Ownership?
Eligibility varies by property and provider. In England, the general rules usually include household income limits and a requirement that you cannot afford all the deposit and mortgage payments for a suitable home on the open market.
First-time buyers
Applicants buying their first home who cannot afford a suitable property outright.
Previous homeowners
People who owned a home before but cannot now afford a suitable replacement.
New households
Applicants forming a new household after separation or a major change in circumstances.
Existing Shared Owners
Current Shared Ownership buyers who need to move to a more suitable property.
Not interested in shared ownership mortgage? Find other options that meet your needs.
Explore other residential mortgage options!
First-time Buyer
Buying your first home can feel overwhelming, but the right mortgage makes the process much clearer. We help you understand deposit requirements, affordability checks, and the options available to first-time buyers.
Moving Home
If you are upsizing, downsizing, or relocating, a moving home mortgage can help you transition smoothly to your next property. We guide you through porting, borrowing, and timing considerations.
Remortgage
A remortgage can help you switch to a better deal, adjust your mortgage term, or release equity from your property. We compare suitable options based on your current situation and future plans.
Shared Ownership
Shared Ownership can be a practical route if you want to buy a share of a property and pay rent on the rest. We help you understand how the mortgage works and what lenders look for.
New Build
Buying a new build property can involve different lender criteria and timelines. We support buyers looking for mortgage options that work with new build homes and developer arrangements.
Right to Buy
If you are eligible to purchase your council home through Right to Buy, we can help you understand the mortgage process and the financial steps involved.
No Deposit Mortgage
If you are exploring options with little or no deposit, we can help you understand specialist routes that may be available depending on lender criteria and affordability.
Low Deposit Mortgage
A low deposit mortgage can be a suitable option for buyers who have not yet built a large deposit but are ready to move forward. We help you compare products that may fit your budget and profile.
How Does a Shared Ownership Mortgage Work?
A shared ownership mortgage finances the share you are purchasing. The lender assesses your income, credit history, deposit, debts and spending, but must also accept the lease, housing provider, property and ongoing rent and service charges.
Provider assessment
The housing provider checks scheme eligibility and whether the proposed share is sustainable.
Mortgage assessment
The lender reviews affordability, credit, deposit source and the total monthly housing commitment.
Property and lease
The lender and solicitor review the lease, valuation, construction and provider requirements.
Passing one assessment does not guarantee the other. An Agreement in Principle is helpful, but final approval still depends on the property and lease.
How Much Shared Ownership Deposit Do You Need?
One of the biggest advantages of Shared Ownership is that your deposit is calculated only on the share you are buying, not on the property's full market value. This means the amount you need to save can be much lower than if you were buying the entire home outright.
For example, imagine a property worth £300,000. If you decide to purchase a 40% share, you are buying £120,000 of the property rather than the full £300,000. If your lender asks for a 5% deposit, you would need £6,000, not £15,000.
The same principle applies regardless of the share you choose. Buying a 25% share means your deposit is based on £75,000, giving an illustrative deposit of £3,750. Buying a 50% share means the deposit is based on £150,000, resulting in an illustrative £7,500 deposit.
While a smaller share usually reduces the amount you need to save initially, it also means you will own less of the property and may pay more rent on the remaining share. Because of that, choosing the lowest possible share is not always the cheapest option over the long term. It is important to compare the combined cost of your mortgage, rent and service charges before deciding how much of the property to buy.
It is also worth remembering that your deposit is only one part of the upfront cost. You should still budget for solicitor's fees, mortgage fees, surveys, moving costs and any Stamp Duty Land Tax that may apply. Keeping some savings aside for these expenses can make the buying process much less stressful.
- ILLUSTRATIVE DEPOSIT EXAMPLES
Based on a £300,000 property
Examples exclude legal fees, mortgage fees and moving costs.
£3,750 deposit
£75,000 share · Based on a 5% deposit.
£6,000 deposit
£120,000 share · Based on a 5% deposit.
£7,500 deposit
£150,000 share · Based on a 5% deposit.
What Are the Full Shared Ownership Costs?
The affordable-looking deposit is only one part of the decision. Your real monthly housing cost combines the mortgage, rent on the unowned share, service charges and the normal costs of running and maintaining a home.
- A realistic budget should include every stage of the transaction, not just the mortgage.
Include every payment before choosing your share percentage:
Mortgage payment
Repayment on the share you own.
Rent
Rent on the housing provider’s remaining share.
Service charge
Communal maintenance, management and shared facilities.
Insurance and estate fees
Building insurance contributions or estate charges.
Repairs and maintenance
Responsibilities are determined by the lease.
Emergency buffer
Allow for future increases and unexpected property costs.
How Shared Ownership Staircasing Works
01
Check the lease
Confirm the minimum share increment and whether ownership can reach 100%.
02
Arrange a valuation
Additional shares are priced using the property’s current market value.
03
Review your funding
Use savings, further borrowing or a remortgage, subject to affordability.
04
Complete the purchase
Allow for legal, valuation, mortgage and provider administration costs.
Can You Sell a Shared Ownership Property?
You can sell a Shared Ownership home, but the housing provider may have an initial nomination period to find an eligible buyer if you own less than 100%. A formal valuation is usually required, and provider, legal and mortgage fees may apply.
Your proceeds relate to the share you own, after repaying the mortgage and relevant selling costs.
The provider may have the first opportunity to market your share to an eligible purchaser.
A RICS valuation and provider administration or marketing fees may be required.
Lease length, building safety, service charges and restrictions can affect buyer demand and mortgage availability.
Shared Ownership Pros and Cons
Potential advantages
A smaller initial mortgage and deposit may make a suitable home accessible sooner. You can build equity in your share and may be able to reduce the rent by purchasing more shares later.
Points to consider
You normally pay a mortgage, rent and service charges together. Rent and charges can rise, lease restrictions apply, and staircasing or selling may involve additional fees and a narrower lender market.
Is Shared Ownership Worth It?
Shared Ownership may suit buyers who cannot afford a comparable home outright and can comfortably manage the combined costs over the long term.
The right question is not only
“Can I raise the deposit?”
but also
“Can I sustain the full cost?”
Compare the arrangement with renting, a standard mortgage and other suitable properties. The purchase should remain affordable even if mortgage rates, rent or service charges increase and staircasing takes longer than expected.
Check the mortgage, rent and lease before you reserve.
Speak with a mortgage adviser and get clear guidance tailored to your circumstances.
Shared Ownership Questions Answered
Usually, unless you can purchase the share in cash and the provider permits a cash purchase.
Potentially. You may qualify when you cannot currently afford a suitable home and meet the provider’s conditions.
Yes, subject to sustainable income evidence, lender criteria and the provider’s affordability assessment.
Rent reduces as you buy more shares and normally ends at 100% ownership, although service and estate charges may continue.
Whole-property subletting is commonly restricted because the home is intended to be your main residence. Check the lease, lender and provider rules.
No. Compare the mortgage, rent, service charges, repairs, fees and flexibility before deciding.
Let's Find the Right Mortgage for You
Amir Shojaee
Director and Founder of PBSBrokers
CeMAP Qualified Mortgage Adviser
At PBSbrokers, we offer a free initial consultation to review your income, deposit, affordability, credit profile, and mortgage objectives. Whether your case is straightforward or more complex, we'll help you understand the options that may be available and guide you through the next steps.
