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Shared Ownership Mortgages: A Practical Guide to Buying a Home with a Smaller Deposit (2025)

What Is a Shared Ownership Mortgage?

A Shared Ownership Mortgage allows buyers to purchase a percentage of a property, typically between 10% and 75%, while paying rent on the remaining share to a housing association. This structure is part of the national Shared Ownership scheme, designed to support people who cannot afford to buy a home outright.

Under this model, you only need a mortgage for the portion you buy, which reduces both the required deposit and the monthly mortgage repayments. Shared Ownership is available for many new-build homes and selected resale properties.

How the Shared Ownership Scheme Works

Under the Shared Ownership scheme, the buyer pays a deposit and mortgage based only on the share they purchase. The remaining share is rented from a housing association at a subsidised rate. Over time, homeowners may choose to buy additional shares, a process known as staircasing, which can eventually lead to full ownership.

Most Shared Ownership properties are leasehold, meaning there are responsibilities such as service charges, ground rent, and maintenance obligations. The lease outlines these financial commitments, which are important to review carefully before applying.

Eligibility Requirements

The Shared Ownership scheme targets households who need support entering the property market. Generally, applicants must meet the following conditions:

A total household income of £80,000 or less (or £90,000 or less in London)
Being a first-time buyer, a former homeowner who cannot afford to purchase again, or an existing shared owner moving to another Shared Ownership home
Passing affordability checks set by lenders and the housing association

Meeting mortgage lender criteria is also essential, as the mortgage is used to finance the portion of the home being purchased.

Benefits of a Shared Ownership Mortgage

Lower Deposit Requirements

Because deposits are based on the purchased share rather than the full property price, Shared Ownership often requires significantly less upfront capital.

Lower Monthly Mortgage Payments

Monthly costs are divided into mortgage repayments for your share and rent for the remaining share, which can create a more manageable budget.

Ability to Increase Ownership Over Time

Through staircasing, homeowners can gradually buy more of the property when financially possible, offering long-term flexibility.

Access to High-Quality New-build Properties

Many Shared Ownership homes are part of newly built developments, often providing upgraded energy efficiency and modern facilities.

Important Considerations Before Applying

While the Shared Ownership scheme is a strong affordable home ownership option, buyers should be aware of several key considerations:

Additional costs: Service charges, ground rent, maintenance fees, and insurance
Leasehold rules: Some responsibilities may apply even if you own a small share
Selling restrictions: Housing associations may have the right of first refusal when you sell your share
Long-term costs: Rent typically increases annually, and staircasing involves valuation and legal fees

Carefully reviewing the financial obligations and lease terms is essential to determine whether this structure aligns with your long-term plans.

Is a Shared Ownership Mortgage Right for You?

A Shared Ownership Mortgage can be a strategic way to begin your homeownership journey if you have stable income but limited savings for a full deposit. It suits buyers who prefer to start with a smaller share and build equity gradually.

This approach allows many people to move from renting to owning sooner, especially in areas where full property prices are out of reach. However, it’s important to understand the full cost structure and your ability to staircase over time.

How PBSBrokers Can Help

At PBSBrokers, we offer clear guidance to help you understand whether a Shared Ownership Mortgage is the right fit for your circumstances. Our team reviews your goals, current situation, and affordability to identify suitable options and recommend the most appropriate lending routes.

We provide personalised, bilingual support in Farsi and English, helping you navigate your choices with confidence and clarity. Whether you’re exploring your first step onto the property ladder or considering future plans, we’re here to ensure you move forward with the right information and a mortgage strategy that aligns with your needs.

Disclaimer

Information such as eligibility criteria, income limits, lender requirements, and scheme rules may change over time. For up-to-date advice based on your personal circumstances, please contact PBSBrokers.