Shared ownership explained

Buying a home can feel challenging, especially for first-time buyers facing high deposits and rising prices. Shared ownership is a government-backed scheme that makes homeownership more affordable by letting you buy a share of a property (typically 25-75%) and pay rent on the rest.

The shared ownership scheme allows you to purchase a share of a home (between 25% and 75%) rather than buying it outright. The remaining share is owned by a housing association or similar organisation. You pay a mortgage on your share and rent on the portion you don't own, usually at a reduced rate compared to market rent.

Over time, you can increase your ownership through "staircasing", purchasing additional shares until you own 100% of the property. This happens in stages at current market value, so you benefit from any property price increases on your share while gradually reducing the rent you pay.

The scheme is designed specifically for first-time buyers who can't afford a full deposit but can manage monthly mortgage payments plus reduced rent. It's particularly helpful in high-cost areas where standard purchases feel out of reach.

For detailed guidance on buying additional shares, read our staircasing guide.

The schemes are primarily provided by housing associations, which are not-for-profit organisations that manage affordable housing across England. Major providers include L&Q, Clarion, Peabody, Notting Hill Genesis and hundreds of smaller regional associations.

Some property developers also offer these schemes as part of new build developments, working in partnership with providers. Your local authority coordinates schemes in your area and can direct you to available properties.

To find shared ownership properties, start with the Share to Buy website, the official search portal. You can also browse individual landlord websites or contact local estate agents who work with shared ownership schemes.

It's worth noting that availability varies significantly by region. London and the South East typically have more schemes available due to higher property prices, while shared ownership may be less common in areas with lower house prices where standard purchases are more affordable for first-time buyers.

Shared ownership is available to individuals and families who meet certain criteria. These requirements ensure that the scheme benefits those who need it most.

You must be a first-time buyer or someone who has previously owned a property but can no longer afford to buy one outright. Your annual household income should typically be under £80,000 (or £90,000 in London). This ensures that shared ownership helps those with lower or moderate incomes.

You must be able to secure a mortgage for at least part of the property. The amount you can borrow depends on your creditworthiness and income. Some shared ownership schemes prioritise people who already live in the local area or work in the region.

Older first-time buyers (typically 55+) can access Older People's Shared Ownership (OPSO), which has similar terms but properties are designed for later life. Members of the armed forces may receive priority in certain areas under government initiatives.

It's important to note that eligibility criteria can vary depending on the region and the specific housing association, so it's always a good idea to check with the relevant provider.

This is one of several schemes designed to help first-time buyers. To see how it compares to other options like First Homes, Help to Buy ISAs and the Lifetime ISA, read our complete guide to first time buyer government schemes.

For broader guidance on buying your first home, see our step-by-step first-time buyer guide.

Understanding the cost structure is essential before committing to shared ownership.

Deposit: Your deposit is calculated on the share you're buying, not the full property value. For example, buying a 25% share of a £200,000 property with a 10% deposit means you need £5,000, not £20,000. Learn more about how much deposit first time buyers need.

Monthly payments: You'll pay both a mortgage on your share and rent on the portion you don't own (typically around 2.75% of the unsold equity annually). This rent usually increases each year with inflation. As a first-time buyer, you'll also benefit from stamp duty relief on properties up to £425,000.

Service charges: Properties with communal areas incur service charges for maintenance, typically £500-£2,000+ annually. These can increase each year, so factor this into your budget.

Leasehold ownership: Shared ownership properties are always leasehold with typical lease lengths of 99-125 years. Understanding the difference between freehold and leasehold is important before you commit.

Staircasing costs: Buying additional shares requires a RICS valuation (£250-£500), legal fees (£500-£1,000) and potentially mortgage fees. You pay current market value for new shares, not the original price.

Conveyancing for shared ownership follows the same basic steps as a standard property purchase, but with important additional complexities. Read our guide to the conveyancing process to get all the details.

What makes shared ownership conveyancing different?

Dual transaction: You're simultaneously buying your share from the provider and entering into a lease agreement for the portion you don't own. This creates additional legal documentation and checks beyond a standard purchase.

Critical lease review: The lease governs your entire relationship with the property. Your solicitor must scrutinise:

• Staircasing provisions: Can you buy up to 100% ownership, or is there a cap at 75-80%?
• Rent review clauses: How much can rent increase annually? (Usually RPI or CPI plus a percentage)
• Restrictions: Limitations on alterations, subletting, pets and resale
• Right of first refusal: Does the organisation have the right to buy your share back?
• Service charge history: Past increases and planned major works that could affect costs

Housing association involvement: Your solicitor will conduct additional enquiries about the provider's financial stability, service charge accounts and any upcoming works. Some lease clauses can cause mortgage lenders to refuse lending, so thorough review is essential before exchange.

Specialist solicitor required: Choose a conveyancing solicitor experienced in shared ownership transactions because the additional complexity means expertise matters. Legal fees typically range from £800 to £1,500, slightly higher than standard conveyancing.

Timeline: Expect 8-12 weeks from offer acceptance to completion, similar to standard purchases but potentially longer if lease issues arise.

The scheme has clear benefits: lower deposits, reduced rent compared to private renting and the ability to build equity while staircasing to full ownership over time. It's a government-backed scheme that has helped thousands of first-time buyers onto the property ladder.

However, it also comes with restrictions and ongoing costs. You'll pay both rent and mortgage, have limited control over alterations, face longer selling timelines due to provider involvement and be responsible for all repairs despite only owning a share. Service charges and rent typically increase annually.

Before committing, carefully consider whether the monthly costs are sustainable long-term and whether the restrictions fit your lifestyle. Run detailed cost comparisons with standard purchases and private renting. Think about your plans for the next 5-10 years, as shared ownership works best when you stay put for a while and can gradually increase your share.

Consider whether you're comfortable with the landlord approval for major decisions like subletting, pets or significant alterations. Check the specific terms of your lease carefully, as staircasing caps, rent increases and resale restrictions vary between properties.

If shared ownership feels right for you, the next step is finding an experienced conveyancing solicitor to handle the legal part. At Homeward Legal, we work with solicitors experienced in shared ownership conveyancing and can guide you through the entire process. Whether you're applying for your first share or staircasing to increase your ownership, our expert team ensures a smooth transaction.

We also support first-time buyer conveyancing more broadly, helping you navigate government schemes, stamp duty relief and all aspects of purchasing your first home.

Call us on to speak with one of our friendly experts, or get your instant conveyancing quote today.