Shared ownership lets you buy 10 to 75 per cent of a home and pay subsidised rent on the rest. The draw is the deposit: 5 to 10 per cent of the share, not the whole property — on a £280,000 flat at 40 per cent, around £11,200 instead of £28,000. The catch is the monthly stack: mortgage, rent capped at 3 per cent of the landlord’s share, service charge, and on most leases the bill for every repair — including on the part you do not own.
There were 252,000 shared ownership households in England in 2024/25, up from 161,000 five years earlier, says the English Housing Survey shared owners fact sheet. It is also the least-loved form of ownership in that survey: 71 per cent of shared owners were satisfied with their tenure, against 95 per cent of other leaseholders, though satisfaction with the accommodation itself was closer, at 83 per cent against 90 per cent. Here is how it works and who it suits.
How shared ownership actually works
You buy a share of a new-build or resale home from a housing association, council or other registered provider. GOV.UK sets the range at 10 to 75 per cent of full market value, though most homes are marketed from 25 per cent. You take an ordinary residential mortgage on the share, put down 5 to 10 per cent of the share price, and pay subsidised rent on the rest. Every shared ownership home is leasehold, so you are leaseholder and tenant at once.
This is the England scheme. Scotland runs LIFT and New Supply Shared Equity, Wales has its own arrangements, and Northern Ireland uses Co–Ownership Housing. Share ranges, rents and price caps all differ, so do not apply English figures elsewhere.
Who is eligible, and who is not
The headline test is income. GOV.UK caps household income at £80,000 a year, rising to £90,000 in London — the capital gets more headroom, not less, which trips people up.
You must also fit one of five categories: first-time buyer; former owner who cannot afford to buy now; someone forming a new household after a relationship breakdown; an existing shared owner wanting to move; or an owner who wants to move but cannot afford a home meeting their needs.
Individual schemes add filters. Many require a local connection — living, working or having ties in the area — and serving armed forces personnel get priority. Buyers aged 55 or over can use Older People’s Shared Ownership, capped at 75 per cent but rent-free at that level.
The deposit maths, which is the real attraction
Take a new-build flat worth £280,000, the figure HMRC uses in its own shared ownership example. Buying outright with a 10 per cent deposit needs £28,000. A 40 per cent share costs £112,000, so the same deposit is £11,200 and the mortgage falls from £252,000 to £100,800.
That is transformative if your obstacle is savings, and far less useful if it is income, because lenders count the rent and service charge as committed expenditure.
The full monthly cost stack people underestimate
Buyers compare the shared ownership mortgage with an open-market one, see a big gap and stop. The honest comparison adds everything. Rent is capped: GOV.UK puts the limit at 3 per cent of the share the landlord owns, with most charging 2.75 per cent. On our flat at 40 per cent the landlord keeps £168,000, so rent at 2.75 per cent is £4,620 a year — £385 a month. At the 3 per cent cap it would be £5,040 a year, or £420 a month, taking the total stack to about £1,130.
Then the service charge, which on a modern flat routinely runs to three figures a month and covers communal maintenance, lifts, grounds and the buildings insurance premium; ground rent where the lease charges it; and any sinking fund. None of these shrink because you own 40 per cent — you pay the full charge on the whole flat.
On those illustrative numbers shared ownership saves roughly £456 a month and £16,800 of deposit. Real money. But £385 of the £1,095 is rent, and rent buys no equity. That is the trade. The English Housing Survey put shared owners’ average rent at £98 a week and mortgage at £118 a week in 2024/25, with housing costs taking 23 per cent of income — below private renters on 33 per cent, above other mortgagors on 19 per cent.
Repairs, and the 2021 model lease that changed them
Here is the rule that catches almost everyone: you pay for repairs and maintenance whatever share you own. Owning 25 per cent does not mean paying a quarter of a new boiler.
The 2021 model lease softened this. Those leases carry an initial repair period, usually 10 years, when the landlord meets essential external repairs and essential structural repairs to walls, floors, ceilings and stairs inside your home. You can also claim up to £500 a year towards fixtures supplying water, gas, electricity or heating, with one year’s unused allowance rolling forward.
Older leases have none of that. The Commons committee inquiry into shared ownership found that under the 2016–23 programme shared owners cover 100 per cent of repair costs from day one, and warned of a two-tier market. Ask which lease model a home is on first.
| Lease feature | Older model (pre-April 2021) | 2021 model lease |
|---|---|---|
| Minimum initial share | 25 per cent | 10 per cent |
| Lease length when new | Typically 99 years | Minimum 990 years |
| Repairs in early years | Leaseholder pays 100 per cent from day one | 10-year initial repair period; up to £500 a year claimable |
| Minimum staircasing purchase | 10 per cent (25 per cent on some leases) | 5 per cent, plus a 1 per cent option each year for 15 years |
| Landlord admin fee on staircasing | Charged on every step, typically £150–£500 | Same fee on steps of 5 per cent or more; no fee on the 1 per cent option |
| Nomination period on resale | Up to 8 or 12 weeks | Reduced to 4 weeks |
| Rent review cap (set by lease signing date, not by model) | Signed before 12 October 2023: RPI plus 0.5 per cent. Signed on or after: RPI plus up to 0.5 per cent, or CPI plus 1 per cent. | |
Staircasing, and why reaching 100 per cent is expensive
Buying more shares is called staircasing, and the price is set on what the home is worth now, not what you paid. If values rise, every slice costs more.
GOV.UK explains that most leases allow purchases of 10 per cent or more, some older leases insist on 25 per cent, and newer ones allow 5 per cent. Homes bought from 1 April 2021 also allow one 1 per cent purchase a year for 15 years — not 2, 3 or 4 per cent. Those are priced off the original price adjusted by the House Price Index, with no admin fee.
Everything else costs. A share of 5 per cent or more needs a RICS-registered valuation, which you usually pay for and which expires within months. You pay your own legal fees, and the landlord’s admin fee runs from around £150 to £500. With a remortgage, each step can cost well over a thousand pounds.
Few finish the climb. The Commons committee heard that only around 3 per cent of shared owners reach 100 per cent ownership in any year, from 0.7 per cent in the North East to 15.3 per cent in London. Evidence put to it also found their costs reach roughly open-market levels after 15 years.
Rent reviews and the formula that bit during high inflation
Rent is reviewed at intervals set in the lease, usually annually. GOV.UK is blunt: it may go up at review, and it will not go down.
The formula depends on the signing date. Leases signed before 12 October 2023 are capped at RPI over the previous 12 months plus 0.5 percentage points. Leases signed on or after that date use either RPI plus up to 0.5 points or CPI plus 1 point.
During the 2022–23 inflation spike, double-digit RPI readings meant rent rises of a similar order while mortgages repriced upwards too. The Commons committee heard from a shared owner whose service charge alone climbed 39 per cent in two years to £4,589. Things are calmer — the Office for National Statistics put CPI at 2.8 per cent and RPI at 3.1 per cent in the 12 months to May 2026 — but stress-test at a higher figure.
Selling can take longer than you expect
You can sell at any time, but not simply by instructing an agent. The lease gives the landlord a nomination period to find a buyer first — GOV.UK says 4, 8 or 12 weeks, with the 2021 model cutting it to four. Only then can you market it.
The price is based on a RICS valuation you pay for, and the landlord may charge a sale fee on top of your legal costs. The buyer pool is narrower, because purchasers must meet the same eligibility rules and find a shared ownership mortgage. Shared ownership therefore sits badly with a short time horizon.
Mortgages and stamp duty on a shared ownership home
Getting the mortgage
Not every lender offers shared ownership, and those that do add their own rules: a deposit of 5 to 10 per cent of the share, an affordability test treating rent and service charge as fixed commitments, and minimums on share size and lease term. A broker experienced in shared ownership can help, as lender criteria vary.
Stamp duty: two routes, one decision
HMRC gives shared ownership buyers a choice. Make a market value election, paying stamp duty up front on the full market value, and you never pay again however far you staircase. Or pay only on the share bought, with nothing further due until you own more than 80 per cent, when the transaction crossing that line is taxable.
HMRC’s example takes a 50 per cent share of a £280,000 home: an election produces £4,000 — nothing on the first £125,000, 2 per cent on the next £125,000, 5 per cent on the final £30,000. First-time buyer relief may apply to your first share. Roughly: elect if you expect to staircase all the way, pay on the share if you expect to move on.
Work out the number before you fall for the flat
Add mortgage, rent, service charge and repairs into one monthly figure, then compare it with renting and with buying outright.
Explore GetSmartSaver →Who shared ownership suits, and who should walk away
It works when your problem is the deposit rather than the income, when you will stay put for five to ten years, when the home is on a 2021 model lease, and when you can absorb a bad year on service charges.
It works badly when your income is stretched, because you carry a mortgage, a rent and an uncapped service charge at once. It works badly if you might move within a couple of years, or on an older lease in a block with unresolved building-safety work.
- Ask which lease model the home is on, pre-2021 or 2021, before anything else.
- Get the key information document and three years of service charge accounts.
- Check the rent review clause: RPI plus 0.5, or CPI plus 1, and on what date.
- Decide the stamp duty route with your conveyancer, not after completion.
The alternatives worth pricing first
First Homes sells some new-builds to first-time buyers at a discount passed on to each future buyer. A Lifetime ISA adds a 25 per cent bonus to savings of up to £4,000 a year, and can go towards a first home costing £450,000 or less — withdrawing for anything else costs 25 per cent. A 95 per cent mortgage under the mortgage guarantee scheme buys the whole home with a 5 per cent deposit. Or buy a smaller home outright.
Shared ownership lenders scrutinise credit files closely, and a thin file is a common reason applications stall.
Next steps. Set your ceiling with our guide to how much you can borrow on a mortgage in 2026, then read the first-time buyer mortgage guide. Check the tax against our breakdown of stamp duty rates and first-time buyer relief, then run it through the rent vs buy calculator with rent and service charge in.
Frequently Asked Questions
Can you buy a shared ownership home with a 5 per cent deposit?
Usually yes. GOV.UK says the deposit is normally 5 to 10 per cent of the share you buy, not of the whole property. On a 40 per cent share of a £280,000 home, that is £5,600 at 5 per cent. Lenders set their own minimums, and some want 10 per cent.
Do you pay stamp duty on a shared ownership property?
You choose. A market value election means paying stamp duty on the full market value at the outset and never paying again, however far you staircase. Alternatively you pay only on the share bought, with nothing further due until you own more than 80 per cent. First-time buyer relief may apply.
Who pays for repairs in a shared ownership home?
You do, whatever share you own. Homes on the 2021 model lease get an initial repair period, usually 10 years, when the landlord covers essential external and structural work, plus up to £500 a year claimable for fixtures supplying water, gas, electricity or heating. Older leases have neither.
How much can shared ownership rent go up each year?
It depends on the lease date. Leases signed before 12 October 2023 are capped at RPI over the previous 12 months plus 0.5 percentage points. Later leases use either RPI plus up to 0.5 points or CPI plus 1 point. GOV.UK notes rent may rise at review but will not fall.
Is it hard to sell a shared ownership home?
It is slower rather than impossible. The lease gives your landlord a nomination period of 4, 8 or 12 weeks to find a buyer before you can market freely, and the price is set by a RICS valuation you pay for. The buyer pool is smaller, because purchasers must meet the eligibility rules.
Does shared ownership work the same way across the UK?
No. The 10 to 75 per cent share range, the £80,000 and £90,000 income caps and the 2021 model lease apply to England only. Scotland runs LIFT and New Supply Shared Equity, Wales has its own arrangements, and Northern Ireland uses Co–Ownership Housing. Share ranges, rents and price caps differ in each.
Last reviewed: August 2026. Figures verified against GOV.UK, the ONS and the House of Commons Levelling Up, Housing and Communities Committee. Terms vary between leases and landlords, so always check the key information document and the lease itself. This article is general information, not personal financial advice.
