Shared Ownership Scheme: Helping You Become a Homeowner

The shared ownership scheme is a government-supported initiative that helps individuals or households who cannot afford to buy a property outright. It is designed to provide an opportunity for people to become homeowners by purchasing a share of a property and paying rent on the remaining portion.

How Shared Ownership Works

Under the shared ownership model, you purchase a percentage of a property — typically between 25% and 75% — and pay a subsidised rent on the remaining share to a housing association. You will need a mortgage to cover your share, plus a deposit (usually 5% to 10% of the share value, not the full property price).

For example, if a property is worth £250,000 and you buy a 40% share, you would need a mortgage and deposit for £100,000. You would then pay rent to the housing association on the remaining £150,000 share.

Over time, you can increase your ownership stake through a process called staircasing. This involves buying additional shares at the current market value, which is determined by an independent valuation. Each time you staircase, your rent reduces proportionally — and if you reach 100% ownership, rent payments stop entirely.

Different Rules for Shared Ownership in Northern Ireland, Scotland, and Wales

The shared ownership scheme operates differently across the UK. The initial purchase amount of shares, the cap on the value of the property you can buy, the monthly rent payment, and staircasing methods to increase your share in the property may differ between schemes.

It is important to check the specific rules and eligibility criteria for the region you are looking to buy in, as each devolved nation administers its own version of the scheme with different terms and conditions.

Eligibility Criteria for the Shared Ownership Scheme

Prospective buyers must meet certain criteria to qualify for the scheme. Typically, you would be a first-time buyer, have a household income within a specified range, and not be able to purchase a suitable home on the open market. However, if you already own another home or want to move but cannot afford a new home that meets your needs, you may still apply for the scheme.

In England, the household income cap is currently £80,000 (or £90,000 in London). You must also demonstrate that you cannot afford to buy a suitable home without assistance, and you should not already own a property unless you are in the process of selling it.

✅ You must meet the household income range.

✅ You cannot afford all of the deposit and mortgage payments on the open market.

⭕️ You are a first-time buyer.

⭕️ You own a home and have formally accepted an offer for its sale with written confirmation.

⭕️ You are an existing shared owner.

What Types of Properties Are Available?

Shared ownership properties include both new-build and resale homes. New-build homes are sold directly by housing associations and are often part of larger developments. Resale shared ownership homes are sold by existing shared owners, though the housing association typically has the right to find a buyer first before the property can be sold on the open market.

Properties can range from flats and apartments to houses, depending on what is available in your area. Most shared ownership properties are sold on a leasehold basis, which means you will have a lease agreement with the housing association that sets out your rights and responsibilities.

Pros of the scheme

✅ Deposits required are lower than buying on the open market.

✅ Mortgages are more accessible, even for those with lower income.

✅ Monthly rents are generally lower compared to private renting.

✅ You can purchase more shares of your home in the future, up to 100%.

✅ You can pay part of the Stamp Duty on the initial purchase.

✅ You benefit from any increase in the property’s value on your owned share.

Cons of the scheme

❌ You are required to pay 100% of the ground rent and service charge, regardless of how low your share is.

❌ If you have not already paid the full Stamp Duty at the beginning, you will need to pay it on the entire value of the property at the time when you owned 80% or more of the share.

❌ Shared Ownership properties are sold on a leasehold basis, which may restrict you from making home improvements.

❌ Selling a shared ownership home can take longer due to the housing association’s nomination period.

❌ You may face restrictions on subletting or renting out the property.

Is Shared Ownership Right for You?

Shared ownership works best for people who have a stable income but struggle to save a large deposit or secure a mortgage for the full property value. It is particularly suited to first-time buyers, key workers, and those currently renting who want to start building equity.

Before committing, it is worth considering your long-term plans. If you expect your income to grow significantly, staircasing to full ownership can work out well. However, if your circumstances are uncertain, make sure you understand all the costs involved — including rent, service charges, and staircasing fees — so there are no surprises along the way.

For a detailed breakdown of the financial differences, see our guide on shared ownership vs full ownership. Once you’re ready to explore the costs in more detail, head to our next step on the costs of buying a shared ownership home.