Shared Ownership Mortgages UK — How They Work
Shared ownership lets you buy a share of a property (typically 25-75%) and pay rent on the rest. This guide explains eligibility, staircasing, costs, and how to apply for a shared ownership mortgage in the UK.
Shared ownership is one of the most accessible routes onto the property ladder for people who cannot afford to buy a home outright on the open market. The scheme allows you to purchase a share of a property, typically between 25% and 75%, while paying a subsidised rent on the remaining share to a housing association. Because your mortgage and deposit are based only on the share you buy rather than the full property value, the upfront costs are significantly lower than a conventional purchase.
In this guide we explain exactly how shared ownership works in the UK, who qualifies, what staircasing means and how it lets you eventually own your home outright. We also break down the real costs involved, including the rent you pay on the housing association’s share, service charges, and the fees you should budget for. If you are weighing up whether shared ownership is right for you, our borrowing calculator can help you work out what you can afford on your income.
Whether you are a first-time buyer priced out of your local market or a previous homeowner who can no longer afford to buy outright, shared ownership could be the solution. Our mortgage advisers at Clearview work with housing associations and specialist lenders across the UK, and we can guide you through the entire process from initial eligibility to picking up your keys. Get in touch for free, personalised advice.
Who qualifies for shared ownership?
Shared ownership is aimed at households who cannot afford to buy a suitable home on the open market. To qualify, your total household income must be £80,000 or less per year, or £90,000 or less if you are buying in London.
You must be at least 18 years old and either a first-time buyer, a previous homeowner who can no longer afford to buy, or an existing shared owner looking to move. You should not already own another property at the time of purchase.
Priority is given to existing local authority or housing association tenants, members of the armed forces and their families, and people who live or work in the local area. Each housing association may apply additional local criteria, so it is worth checking directly with the provider managing the development you are interested in.
Shared ownership is aimed at households who cannot afford to buy a suitable home on the open market. To qualify, your total household income must be £80,000 or less per year, or £90,000 or less if you are buying in London. You must be at least 18 years old and should not already own another property at the time of purchase.
Contrary to popular belief, shared ownership is not limited to first-time buyers. Previous homeowners who can no longer afford to purchase outright are also eligible, as are existing shared owners looking to move to a different property.
Income requirements
- Household income must not exceed £80,000 per year (£90,000 in London)
- Income is assessed jointly for couples buying together
- Some housing associations apply stricter local income caps
- You must be able to demonstrate you cannot afford to buy on the open market
Who can apply
- First-time buyers who meet the income criteria
- Previous homeowners who can no longer afford to buy outright
- Existing shared owners looking to move to a new property
- Must be aged 18 or over and a UK resident
Priority groups
- Current local authority and housing association tenants
- Members of the armed forces, veterans, and bereaved spouses
- People who live or work in the local area of the development
- Key workers in some local authority areas
Affordability still matters
Meeting the income cap does not guarantee you will be approved for a shared ownership mortgage. Lenders will still carry out a full affordability assessment covering your income, outgoings, debts, and credit history. The combined cost of your mortgage payment plus rent on the housing association’s share must be affordable.
Staircasing: buying more shares over time
Staircasing is the process of buying additional shares in your shared ownership property over time, increasing your ownership and reducing the rent you pay to the housing association. You can staircase in stages until you own the property outright at 100%.
Under the new model lease introduced in 2021, you can staircase in increments as small as 1% for the first 15 years. After that, the minimum increment rises to 5%. Each time you staircase, the property is revalued at current market prices, so the cost of additional shares reflects the property’s current worth rather than the original purchase price.
Once you reach 100% ownership, you become a full outright owner and no longer pay rent to the housing association. You will still be responsible for any service charges if the property is a flat or part of a managed development.
Staircasing is the process of buying additional shares in your shared ownership property over time, increasing your ownership and reducing the rent you pay to the housing association. You can staircase in stages until you own the property outright at 100%.
Under the new model lease introduced in 2021, you can staircase in increments as small as 1% for the first 15 years. After that, the minimum increment rises to 5%. Each time you staircase, the property is revalued at current market prices, so the cost of additional shares reflects the property’s current worth rather than the original purchase price.
How staircasing works
- 01
Request a valuation
Contact your housing association to begin the staircasing process. They will arrange an independent RICS valuation of the property at its current market value. You pay for this valuation, typically £300–£500.
- 02
Decide how much to buy
Choose what additional percentage you want to purchase. Under the 2021 lease you can buy as little as 1% at a time during the first 15 years, or a minimum of 5% after that.
- 03
Arrange funding
You can fund the additional share through savings, by remortgaging your existing share, or by taking out a further advance on your current mortgage. A mortgage adviser can help you find the most cost-effective option.
- 04
Complete the legal process
A solicitor handles the legal transfer of the additional share. Your rent is recalculated downwards to reflect the housing association’s reduced share. The whole process typically takes 8–12 weeks.
Staircasing gives shared owners a genuine path to full home ownership. Every additional share you buy reduces your rent bill and increases your equity in the property.
Costs involved in shared ownership
The monthly cost of shared ownership is a combination of your mortgage repayment on the share you own plus rent on the housing association’s share. On top of that, you may need to pay service charges, ground rent, and buildings insurance depending on the property type.
Your deposit is calculated on the share you are purchasing, not the full property value. Most shared ownership lenders require between 5% and 10% of your share. On a 25% share of a £300,000 property, a 5% deposit would be just £3,750, making the scheme far more accessible than a conventional purchase.
You should also budget for one-off purchasing costs including solicitor fees, a mortgage arrangement fee, the valuation fee, and potentially stamp duty. First-time buyers in England currently pay no stamp duty on the first £425,000 of a property’s value, and shared ownership buyers can choose to pay stamp duty on the full property value upfront or on just their share.
The monthly cost of shared ownership is a combination of your mortgage repayment on the share you own plus rent on the housing association’s share. On top of that, you may need to pay service charges, ground rent (if applicable), and buildings insurance depending on the property type.
Your deposit is calculated on the share you are purchasing, not the full property value. Most shared ownership lenders require between 5% and 10% of your share. On a 25% share of a £300,000 property, a 5% deposit would be just £3,750, making the scheme far more accessible than a conventional purchase.
Example costs on a £300,000 home (25% share)
One-off purchasing costs to budget for
Legal and professional fees
- Solicitor/conveyancing fees: £1,000–£1,800 (shared ownership conveyancing is slightly more complex than a standard purchase)
- Valuation fee: £250–£500 (some lenders offer free valuations on shared ownership products)
Mortgage and tax costs
- Mortgage arrangement fee: £0–£1,500 depending on the product (some fee-free deals are available)
- [Stamp duty](/blog/stamp-duty-explained): first-time buyers pay nothing on the first £425,000; you can elect to pay on the full value or just your share
Ongoing costs
- Buildings insurance: usually arranged through the housing association and included in the service charge for flats
- Service charges and ground rent may apply depending on the property type and lease terms
Work out your numbers
- Repayment CalculatorFree tool
Enter your share value, interest rate, and term to see what your monthly mortgage payments would be on a shared ownership property.
- Stamp Duty CalculatorFree tool
Check whether you will owe any stamp duty on your shared ownership purchase and compare the two payment options.
Advantages and disadvantages of shared ownership
Shared ownership has clear benefits for buyers who are priced out of the open market, but it also comes with limitations that are worth understanding before you commit. The scheme is not the right fit for everyone, and it is important to weigh the pros and cons against your personal circumstances.
On the plus side, the lower deposit requirement and smaller mortgage make homeownership accessible to people who would otherwise be stuck renting. You also build equity in the property from day one and have the option to staircase to full ownership over time. However, you are still paying rent on the share you do not own, you may face restrictions on alterations, and selling a shared ownership property can take longer than selling on the open market.
Shared ownership has clear benefits for buyers who are priced out of the open market, but it also comes with limitations that are worth understanding before you commit. The scheme is not the right fit for everyone, and it is important to weigh the pros and cons carefully.
Shared ownership: pros vs cons
| Advantages | Disadvantages |
|---|---|
| Much lower deposit than buying outright (as little as £3,750 on a £300k home) | You pay both a mortgage and rent, so total monthly costs can be similar to renting |
| Smaller mortgage means lower monthly repayments than a full purchase | Rent on the housing association’s share can increase annually (usually by RPI + up to 0.5%) |
| You build equity from day one and benefit from property price growth on your share | Selling can be slower as the housing association has a nomination period to find a buyer first |
| Staircasing lets you increase ownership over time at your own pace | Fewer mortgage lenders offer shared ownership products compared to standard purchases |
| Rent on the housing association’s share is subsidised below market rates | Alterations and subletting usually require housing association permission |
| New 2021 lease includes a 10-year repairs period covered by the housing association | Staircasing costs include valuation and legal fees each time you buy more shares |
Watch out for rent increases
The rent on the housing association’s share is reviewed annually and can increase by RPI (Retail Price Index) plus up to 0.5%. Over a long period this can add up significantly. Make sure you factor potential rent increases into your long-term affordability planning, and consider staircasing sooner rather than later to reduce the proportion of your costs that are subject to rent rises.
How to apply for shared ownership
Applying for shared ownership involves registering with a housing association, finding a suitable property, and securing a shared ownership mortgage. The process is slightly different from a standard property purchase because the housing association is involved at every stage.
Start by checking your eligibility on the government’s Share to Buy website or directly with housing associations operating in your area. Once registered, you can browse available shared ownership properties and express interest in developments that suit your needs and budget.
When you find a property, the housing association will carry out an affordability assessment to confirm you can manage the combined mortgage and rent payments. You will then need to secure a mortgage offer from a lender that offers shared ownership products, instruct a solicitor experienced in shared ownership conveyancing, and complete the purchase.
Applying for shared ownership involves registering with a housing association, finding a suitable property, and securing a shared ownership mortgage. The process is slightly different from a standard property purchase because the housing association is involved at every stage.
Step-by-step application process
- 01
1. Check your eligibility and register
Confirm you meet the income and eligibility criteria, then register on Share to Buy or directly with housing associations in your area. You will need to provide proof of income, savings, and your current housing situation.
- 02
2. Find a property and reserve it
Browse available shared ownership homes on Share to Buy, housing association websites, or through estate agents. Once you find a suitable property, you pay a reservation fee (typically £250–£500) to take it off the market.
- 03
3. Get a mortgage agreement in principle
Speak to a mortgage adviser who specialises in shared ownership. Not all lenders offer shared ownership products, so it is important to work with a broker who knows which lenders are most competitive and flexible for your circumstances.
- 04
4. Housing association affordability check
The housing association carries out its own assessment to confirm you can afford the combined mortgage, rent, and service charge payments. They will decide what share percentage is appropriate for your income level.
- 05
5. Instruct a solicitor and complete
Use a solicitor experienced in shared ownership conveyancing. They will review the lease, handle searches, and manage the legal transfer. The shared ownership lease is more complex than a standard purchase, so specialist experience matters.
- 06
6. Move in and plan ahead
Once you complete the purchase, you become a shared owner. Set up your mortgage payments and rent direct debits, and start thinking about when you might want to staircase to increase your ownership share.
Useful tools and guides
- Borrowing Amount CalculatorFree tool
See how much you could borrow for a shared ownership purchase based on your income and outgoings.
- LTV CalculatorFree tool
Work out your loan-to-value ratio on the share you are buying to understand which rate band you fall into.
- First-Time Buyer Guide
Our comprehensive guide to buying your first home, covering deposits, government schemes, and the full buying process.
- What Is Loan-to-Value (LTV)?
Understand how your deposit size affects your LTV ratio and the mortgage rates available to you.
- Regulator
- FCA register
- Updated
- 24 February 2026
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Interested in shared ownership
Our advisers specialise in shared ownership mortgages and work with housing associations across the UK. We will help you find the right lender and guide you through every step.