Important Legal Notice
This article provides general information only and does not constitute financial, legal, or professional advice. UK property law, taxation rules, and shared ownership regulations change frequently. Before making any financial decisions or entering into shared ownership arrangements, you must:
- Verify all information against current legislation on official government websites (GOV.UK)
- Consult with licensed, regulated professionals including FCA-regulated mortgage advisers, qualified solicitors or licensed conveyancers, and independent financial advisers
- Check that all referenced regulations remain current and applicable to your circumstances
Shared ownership involves complex legal arrangements. Independent professional advice is essential for your specific situation.
Last updated: 2025. Information based on UK law applicable in England. Shared ownership operates differently in Scotland, Wales, and Northern Ireland.
Understanding shared ownership schemes and how programme rules may affect them
Shared ownership is a government-backed affordable homeownership scheme that allows you to buy a share of a property (typically 10% to 75%) and pay rent on the remaining share. According to GOV.UK statistics for 2023-24, 18,324 shared ownership sales were completed, with 76% purchased by first-time buyers.
Since 2021, some homes delivered under the Government’s Affordable Homes Programme use a “new model” of shared ownership with different scheme rules. These are programme rules rather than UK‑wide legislation and do not apply to every shared ownership home. Always check the specific lease and scheme documents for the property you are considering.
Who Qualifies for Shared Ownership?
According to GOV.UK eligibility criteria, you can apply for shared ownership if:
- Your household income is £80,000 or less (£90,000 or less in London)
- You cannot afford all of the deposit and mortgage payments for a home that meets your needs
- You're a first-time buyer, or you used to own a property but cannot afford to buy one now
- You're an existing shared owner looking to move
Some “new model” homes may include features such as:
- Minimum initial share from 10%
- Reduced minimum staircasing amounts (e.g., 5%)
- Optional 1% annual staircasing for a limited period
- A repair support period for certain qualifying works
Availability and exact terms vary by provider and scheme; they are not guaranteed for all shared ownership properties.
How Shared Ownership Costs Work
Understanding the monthly costs and long-term financial implications is crucial. Here's an illustrative example:
Example Shared Ownership Property:
- Property market value: £280,000
- Initial share purchased: 25% (£70,000)
- Typical deposit: 5-10% of share (£3,500-£7,000)
- Mortgage on £63,000-£66,500 (depending on deposit)
- Rent on remaining 75% share (typically 2.75% of remaining value annually)
Monthly Costs Breakdown:
- Mortgage payment on your share
- Rent on the housing association's share
- Service charges (if applicable)
- Buildings insurance (usually covered in service charge for flats)
According to GOV.UK data, the average market price for shared ownership in 2023-24 was £313,100, with a mean initial equity stake of £119,700.
The key advantage is requiring a smaller upfront deposit compared to purchasing 100% of a property.
Understanding Staircasing: Buying More Shares
"Staircasing" means buying additional shares in your property, gradually increasing your ownership percentage. Some schemes introduced since 2021 offer greater flexibility than older models:
Staircasing Options (Scheme‑dependent)
1% Annual Staircasing:
- Available for the first 15 years of ownership
- Can buy exactly 1% share each year
- Price based on original purchase price, adjusted by House Price Index (HPI)
- Housing association provides HPI valuation annually or on request
- Lower legal and valuation costs than traditional staircasing
Standard Staircasing:
- Minimum share purchase amounts vary by lease (often 5% or more)
- Can be done at any time
- Property revalued at current market value
- Legal and valuation fees typically £1,000-£1,500 per transaction
100% Ownership: When you staircase to 100%, you:
- Own the property outright (or own 100% with mortgage)
- Stop paying rent to the housing association
- Become responsible for all repairs and maintenance
- May need to pay a fee to the housing association
Important Considerations:
Each staircasing transaction involves costs. The GOV.UK guidance recommends considering whether multiple small purchases or fewer larger purchases are more cost-effective for your situation.
Advantages and Disadvantages
Advantages of Shared Ownership:
- Lower deposit required: Deposit is calculated on your share, not the full property value
- Gradual increase in ownership: Build equity over time through staircasing
- Access to better locations: May afford areas that would be unaffordable for outright purchase
- New or refurbished properties: Most shared ownership properties are new builds with warranties
- Rent regulation: Rent on the housing association's share is typically capped and regulated
- Government-backed scheme: Transparent rules and protections via GOV.UK oversight
Disadvantages to Consider:
- Monthly costs: Combined mortgage and rent payments, plus service charges
- Limited property choice: Only designated shared ownership properties qualify
- Staircasing costs: Legal and valuation fees for each share purchase
- Potential restrictions: May need permission for improvements or subletting
- Service charges: Can be substantial, especially for flats
- Selling complexities: Housing association has first right to find a buyer (usually 8 weeks)
According to Commons Library research, shared ownership demographics show 32% of buyers are under 30, and 47% are single adult households, indicating it serves buyers who might otherwise struggle to access homeownership.
Important Considerations Before Applying
Key Questions to Ask:
1. Total Monthly Costs Request a complete breakdown including:
- Mortgage payment on your share
- Rent on the housing association's share
- Service charges
- Ground rent (if applicable)
- Buildings insurance
2. Service Charges Service charges can be substantial. Ask for:
- Current annual service charge amount
- What it covers (maintenance, communal areas, insurance)
- Historical increases over the past 5 years
- Who manages the property and sets charges
3. Lease Terms
- Lease length (confirm the actual lease term , it varies by property)
- Ground rent terms
- Restrictions on improvements, subletting, or pets
- Staircasing rights and any restrictions
4. Staircasing Strategy
- Calculate total costs including legal and valuation fees
- Consider fewer, larger purchases to minimize transaction costs
- Understand whether 1% annual staircasing or standard staircasing suits your circumstances
5. Selling Process
- Housing association's nomination period (typically 4-8 weeks)
- Any restrictions on selling
- Whether you can use any estate agent
Official Statistics and Resources
2023-24 Shared Ownership Data
According to GOV.UK's Social Housing Sales report:
- 18,324 shared ownership sales completed in 2023-24
- 76% were first-time buyers
- Average property market value: £313,100
- Mean initial equity stake: £119,700 (approximately 38%)
- 65% were houses, 33% were flats or maisonettes
- 32% of buyers under age 30, 33% aged 30-39
- 47% single adult households, 27% couples with no children
How to Apply
- Check eligibility via GOV.UK Shared Ownership page
- Search for properties on Share to Buy or housing association sites (popular portals exist; they are not official government portals)
- Contact the housing association managing the property
- Arrange mortgage - you'll need a mortgage for your share
- Complete legal process - similar to standard property purchase
Additional Resources:
- MoneyHelper Shared Ownership Guide - Independent financial guidance
- Homes England - Regulates affordable housing programs
- House of Commons Library Research - Comprehensive shared ownership analysis
Is Shared Ownership Right for You?
Shared ownership may suit you if:
- Your income is steady but you have limited savings
- You cannot afford the full deposit for the property you need
- You're comfortable with gradual equity building
- You understand and accept the monthly costs (mortgage + rent + service charges)
- You plan to live in the property long-term
Consider alternatives if:
- You have sufficient savings for a traditional mortgage deposit
- Service charges and rent payments make monthly costs unaffordable
- You need maximum flexibility to move or sell quickly
- The available shared ownership properties don't meet your needs
Seek independent financial advice to determine the best approach for your circumstances. The government's MoneyHelper service provides free, impartial guidance on homeownership options.
Professional Advice and Regulatory Compliance
Before entering into any shared ownership arrangement, always verify current legislation on GOV.UK and consult appropriately qualified professionals:
- FCA-regulated mortgage advisers - Verify at FCA Register
- Qualified solicitors or licensed conveyancers - Verify at SRA or CLC
- Independent financial advisers - For affordability assessment and long-term planning
- Qualified accountants - For tax implications (ICAEW, ACCA, CIMA members)
Regulatory Bodies: FCA | SRA | Homes England | HMRC
Verify Current Legislation: GOV.UK | Legislation.gov.uk | MoneyHelper
Disclaimer: This article is for general guidance only and does not constitute financial, legal, tax, or professional advice. Shared ownership arrangements are complex and involve significant long-term financial commitment. Every individual's circumstances are different. You must obtain independent professional advice specific to your situation before making any decisions. The author and publisher accept no liability for any loss or damage arising from reliance on this information. All information is believed accurate at time of publication but may become outdated as legislation and scheme rules change.