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A guide to shared ownership and how it works
Shared ownership is a scheme backed by the state. It helps people buy a home when they lack the funds for the full price.
You buy a share of a home (often 10% to 75%). You pay rent on the rest. Per GOV.UK data for 2023-24, there were 18,324 sales. 76% were first-time buyers. For many, shared ownership provides an alternative route to homeownership—comprehensive guidance for first time buyer UK options includes understanding how this scheme compares to traditional purchases.
Since 2021, some homes use a "new model". The rules vary by firm. Not all homes use this model. Check the lease for the home you want.
Who Can Apply?
Per GOV.UK rules, you can apply if:
- Your home earns £80,000 or less (£90,000 in London)
- You lack the funds for a deposit and loan for a home you need
- You are a first-time buyer, or you once owned but lack funds now
- You are an owner who wants to move
Some "new model" homes may offer:
- Shares from just 10%
- Smaller steps to buy more (as low as 5%)
- 1% yearly steps for a set time
- Help with some fixes
Terms vary by firm. They differ from home to home.
Costs Laid Out
Know the monthly and long-term costs. Here is a sample:
Sample Home:
- Home value: £280,000
- Your share: 25% (£70,000)
- Deposit: 5-10% of your share (£3,500-£7,000)
- Loan on £63,000-£66,500
- Rent on the other 75% (often 2.75% per year)
Monthly Costs:
- Loan on your share
- Rent on the firm's share
- Service fees (if any)
- Cover (often in service fee for flats)
GOV.UK data shows the mean price was £313,100 in 2023-24. The mean share was £119,700.
The key gain: a smaller deposit than buying 100%.
Buying More Shares (Staircasing)
"Staircasing" means buying extra shares in your home. This raises how much you own. Some schemes since 2021 are more open.
Your Options
1% Yearly Steps:
- For the first 15 years you own the home
- Buy just 1% share each year
- Price based on what you paid, plus value changes
- The firm gives you the new value each year
- Lower fees than normal steps
Normal Steps:
- Often 5% or more per buy (check your lease)
- You can do this at any time
- Home is valued at current market price
- Fees are often £1,000-£1,500 each time
Full Owning: When you reach 100%, you:
- Own the home outright (or with a loan). This is similar to getting a first mortgage uk but for a fraction of the property.
- Stop paying rent
- Must pay for all fixes
- May need to pay a final fee
Key Points:
Each buy has costs. The GOV.UK guide says to think about whether many small buys or fewer large buys save you money.
Pros and Cons
Pros:
- Lower deposit: You only need a deposit on your share
- Build value: Raise your share over time
- Better areas: You may afford places too costly to buy outright
- New homes: Most are new builds with warranties
- Rent caps: Rent is often capped
- Clear rules: Backed by GOV.UK
Cons:
- Monthly costs: You pay loan, rent, and service fees
- Less choice: Only some homes are in the scheme
- Fees: Legal and valuing costs for each share you buy
- Rules: You may need a yes for changes or subletting
- Service fees: These can be high, mainly for flats
- Selling rules: The firm finds a buyer first (often 8 weeks)
Per Commons Library data, 32% of buyers are under 30. 47% are single adults. This shows the scheme helps those who lack funds to buy alone.
What to Check Before You Apply
Key Queries:
1. Monthly Costs Ask for a full list:
- Loan on your share
- Rent on the firm's share
- Service fees
- Ground rent (if any)
- Building cover
2. Service Fees These can be high. Find out:
- Current yearly sum
- What it covers (upkeep, shared areas, cover)
- How much it has risen in 5 years
- Who runs the home and sets fees
3. Lease Terms
- Lease length (this varies)
- Ground rent terms
- Rules on changes, subletting, or pets
- Share-buying rights and any limits
4. Buying More Shares
- Work out total costs with fees
- Fewer, bigger buys may cost less
- Pick if 1% yearly or normal suits you
5. Selling
- Firm's search time (often 4-8 weeks)
- Any limits on selling
- Whether you can pick your estate agent
6. Property Condition Before committing to any shared ownership purchase, arrange a thorough inspection. Use a comprehensive property inspection checklist to evaluate the property's condition and identify potential repair costs—this is especially important since you'll be responsible for maintenance on your share from day one.
Facts and Figures
2023-24 Data
Per GOV.UK's report:
- 18,324 sales in 2023-24
- 76% were first-time buyers
- Average value: £313,100
- Mean initial share: £119,700 (about 38%)
- 65% were houses, 33% were flats
- 32% under 30, 33% aged 30-39
- 47% single adults, 27% couples with no children
How to Apply
- Check if you fit at GOV.UK
- Find homes on Share to Buy or firm sites
- Call the firm for the home
- Get a loan for your share
- Do the legal steps (like a normal buy)
Helpful Links:
- MoneyHelper Guide - Free money help
- Homes England - Runs housing schemes
- Commons Library - Full data
Is This Right for You?
It may suit you if:
- You earn steady money but have few savings
- You lack the funds for a full deposit
- You are happy to build your share over time
- You accept the monthly costs (loan + rent + fees)
- You plan to stay long-term
Think about other paths if:
- You have funds for a normal loan deposit
- Rent and fees make monthly costs too high
- You need to move or sell fast
- The homes on offer do not suit you
Get advice to find the best choice for you. MoneyHelper offers free help.
Expert Advice
Before you sign any deal, check rules on GOV.UK and speak to pros:
- Loan advisers - Check at FCA Register
- Lawyers - Check at SRA or CLC
- Money advisers - For budgets and planning
- Tax experts - For tax matters
Bodies: FCA | SRA | Homes England | HMRC
Check Rules: GOV.UK | Legislation.gov.uk | MoneyHelper
Note: This article is for guidance only. It is not legal or money advice. Shared ownership is complex and a long-term commitment. Get expert advice before you decide. The author is not liable for any loss from using this content. Details were correct when published but may change.