How It Works, Deposits, Costs & Eligibility
Shared Ownership allows you to buy a percentage of a property (usually between 10% and 75%) and pay subsidised rent on the remaining share. It’s designed to help buyers who may not have a large deposit or high income get onto the property ladder sooner.
This guide explains the full process, deposit requirements, borrowing limits, staircasing, eligibility rules and common pitfalls.
What Is Shared Ownership?
Shared Ownership is a government-backed scheme where you buy part of a property and rent the remaining share from a housing association or developer. You can later buy more shares (known as staircasing) until you eventually own 100% of the home.
Typical purchase shares:
- 10%
- 25%
- 40%
- 50%
- Up to 75%
You take out a residential mortgage on the share you own only. This reduces the required deposit and income needed to qualify.
How Shared Ownership Deposits Work
One of the main benefits is the smaller deposit requirement. Instead of needing a deposit based on the full property value, your deposit is based only on the share you’re buying.
Example:
- Property value: £350,000
- Your share: 25% (£87,500)
- Required deposit: from 5% of £87,500 = £4,375
This makes Shared Ownership especially appealing for buyers with limited savings. For more on deposit sizes, see our mortgage deposit requirement guide.
How Much Can You Borrow on Shared Ownership?
Lenders still apply the same affordability rules used in normal mortgages, including income multiples (around 4–5× income) and detailed affordability checks.
Your maximum borrowing will depend on:
- Household income
- Debts or commitments
- Deposit size
- Share being purchased
- Rent level on the remaining share
- Service charges and ground rent
If you want a full breakdown of borrowing power, see our guide: How Much Can I Borrow?
Monthly Costs of Shared Ownership
Shared Ownership has three monthly components:
- Mortgage repayment (on your share)
- Rent (on the remaining share)
- Service charges & maintenance fees
Example monthly breakdown:
- Mortgage on 25% share: £420/month
- Rent on 75% share: £550/month (varies by scheme)
- Service charge: £120/month
- Total: £1,090/month — usually cheaper than renting the same property outright.
Eligibility Rules
You may qualify for Shared Ownership if you meet the general requirements:
- Household income below £80,000 (£90,000 in London)
- You cannot afford to buy a suitable home on the open market
- You are a first-time buyer or previous homeowner who cannot buy again
- You have a clean or stable credit profile
- You plan to live in the property (not for letting)
Buyers with previous adverse credit may still qualify — see our guides on mortgages with CCJs and mortgages after defaults.
Staircasing – Buying More Shares Over Time
You can increase your ownership in stages by purchasing additional shares — typically 5%, 10%, or larger increments. This is known as “staircasing.”
Each staircasing step requires:
- A new valuation
- Updated legal work
- Potential mortgage changes
When you reach 100%, you own the property outright and no longer pay rent — just your mortgage and any service charges.
Pros & Cons of Shared Ownership
Pros:
- Smaller deposit required
- Lower income requirements
- Cheaper than renting in many areas
- Ability to staircase gradually
Cons:
- Service charges can be higher
- Must pay rent on the remaining share
- Staircasing costs add up (legal + valuation)
- Selling can be slower because the housing association often has first refusal
Shared Ownership vs 95% Mortgage
| Feature | Shared Ownership | 95% Mortgage |
| Deposit | Lower (based on share) | 5% of full value |
| Income Needed | Generally lower | Higher |
| Ownership | Part-buy, part-rent | 100% Ownership |
| Rent | Paid on unowned share | No rent to pay |
Next Steps
If you’re considering a Shared Ownership purchase and want clarity on affordability, lenders, interest rates and staircasing options, we can connect you with an FCA-regulated adviser who handles these applications daily.
You can also explore related guides such as How Much Can I Borrow? or check deposit rules in our Deposit Guide.
All mortgage advice is provided by FCA-regulated advisers. Your home may be repossessed if you do not keep up repayments on your mortgage.
FAQs
Can I buy more shares later?
Yes — this is called staircasing. You can increase ownership over time until you reach 100%.
Are Shared Ownership properties leasehold?
Yes — almost all Shared Ownership homes are leasehold.
Do I need a big deposit?
No. Deposits often start at just 5% of the share you’re buying, not the full value.
Can I sell a Shared Ownership property?
Yes, but the housing association normally has first refusal or a nomination period.
Does Shared Ownership affect my credit score?
It affects your credit in the same way as any other mortgage — timely repayments help build your score.