Shared Ownership scheme for first-time buyers: how it works

Shared Ownership can be a practical route into homeownership when buying 100% of a property feels out of reach. Instead of purchasing the whole home, you buy a share and pay rent on the portion you don’t own.

In many cases, you’ll also take out a mortgage for the share you buy. Your monthly housing costs can include mortgage repayments + rent. If the property is leasehold (common for flats), you may also need to budget for service charges and other leasehold costs.

This guide explains the main moving parts of Shared Ownership, including how the scheme is structured, what to consider before you commit, and what happens if you want to increase your share or sell later.

• For buying more of your home over time, read our Shared Ownership staircasing guide.

What is the Shared Ownership scheme?

Shared Ownership is usually delivered by housing associations (and sometimes other housing providers). The core concept is consistent:

• You buy an initial percentage share of the property.
• You pay rent to the housing provider on the remaining share.
• You may be able to increase your share over time through staircasing.

Although the overall model is similar, the details can vary by provider, development and the specific agreement for the home you’re considering.

Does “shared” mean you share the home with other people?

Usually, no. The “shared” element refers to ownership being split between you and the housing association. In most Shared Ownership arrangements, you have exclusive use of the home as your residence, but you do so under the lease terms.

How Shared Ownership works (step by step)

While every scheme has its own process, the journey often follows a similar pattern.

1) Find a Shared Ownership home

Shared Ownership homes are usually tied to specific developments. Availability can be limited and opportunities may change as new properties are released.

2) Choose the share you want to buy

Your starting share affects both upfront and ongoing costs.

In general:

• a smaller share can reduce the deposit and mortgage needed at the start
• a larger share can reduce the rent you pay, but typically requires more borrowing and deposit

3) Arrange your mortgage for the share

Once you’ve chosen the property and share, you progress with a mortgage application linked to that purchase.

Affordability is usually assessed in the round, taking into account mortgage repayments + rent (and leasehold costs, where applicable).

4) Complete the purchase and move in

As with any property purchase, there are legal steps and completion.

If you’re buying a flat or apartment, the property is often leasehold, so reviewing the lease and understanding ongoing responsibilities is especially important.

5) Pay mortgage + rent (and leasehold costs, if applicable)

After completion, your monthly outgoings typically include:

• mortgage repayments
• rent to the housing provider
• service charges and/or ground rent (where required by the lease)

Rent may be reviewed under the scheme’s rules, so it’s sensible to consider how changes could affect your budget.

6) Staircasing: buy more shares over time

Staircasing is the process of buying additional shares.

As you increase your ownership:

• your rent usually reduces because you pay rent on a smaller remaining share
• your mortgage may increase if you borrow to fund the additional share purchases

Some agreements allow you to reach 100% ownership, but the timing, frequency and maximum options depend on the specific scheme and lease.

The process: scheme assessment and mortgage application

Shared Ownership often involves two tracks running alongside each other:

1. Scheme provider assessment (confirming you meet the scheme requirements for the property)
2. Mortgage application and affordability checks (confirming you can borrow and repay responsibly)

Because lenders may treat Shared Ownership differently from standard purchases, it can be helpful to consider the mortgage plan alongside the share you’re buying and the expected ongoing costs.

Costs to budget for with Shared Ownership

Shared Ownership can reduce the initial deposit compared with buying outright, but it introduces a different set of costs. Planning for the full picture helps you avoid surprises.

Common costs include:

• deposit (on the share you buy)
• mortgage repayments (on your share)
• rent (on the portion you don’t own)
• service charges (often for leasehold properties)
• ground rent (where applicable)
• maintenance and running costs
• legal, valuation and admin fees when staircasing or selling

Upfront costs (including SDLT on your share)

Common upfront items include:

• a deposit based on the share you’re buying
• Stamp Duty Land Tax (SDLT) (where it applies, depending on the value of the share and the rules in force)
• legal and conveyancing fees

Leasehold considerations (especially for flats)

Many Shared Ownership properties are leasehold. Leasehold means you own the right to occupy the property under the terms of a lease.

Key areas to understand include:

• length of the lease: shorter leases can affect long-term value and may influence future options
• service charges and ground rent: these can be payable periodically and may change
• lease restrictions: rules can apply to alterations, subletting and other responsibilities
• what the lease covers: typically, leaseholders handle the interior while the landlord manages the structure and common parts

Because lease terms vary, reviewing the specific lease for the property you’re considering is essential.

Staircasing: increasing your share

For whether staircasing is compulsory and the things to weigh up before you staircase (including funding, valuations, scheme rules and permissions), see our full Shared Ownership staircasing guide.

Benefits of Shared Ownership

Shared Ownership may suit first-time buyers who want a structured way to get onto the property ladder.

Potential advantages include:

• a route into homeownership with a lower initial deposit than buying 100% (subject to the share you choose)
• the possibility of increasing ownership over time through staircasing (where the agreement allows)
• building equity in the share you own
• paying rent on a smaller portion than you might pay with private renting (subject to scheme rules and reviews)

Potential drawbacks and trade-offs

Shared Ownership isn’t automatically the best option for every buyer. It’s worth weighing the trade-offs.

Common considerations include:

• you don’t own the whole property at the start, so some decisions may involve the housing provider
• rent continues until you reach 100% ownership
• rent can increase over time under scheme rules
• leasehold costs such as service charges can add to monthly outgoings
• staircasing can involve additional fees and may require further borrowing
• selling can be more complex if you don’t own 100% (the housing provider may have rights or processes to follow)
• property choice may be more limited than the open market

Not all lenders offer Shared Ownership mortgages, which can affect your options.

Other Shared Ownership options

There may also be different options for certain age groups, including arrangements that can reduce or remove rent on the share you don’t own (subject to the scheme rules and the property).

Shared Ownership vs renting: what’s different?

With Shared Ownership, you’re not just paying to live in the property, you’re also paying down a mortgage on the portion you own.

However, it’s still not the same as owning outright from day one. You’ll typically have ongoing rent obligations and lease-related responsibilities.

Practical considerations before you commit: alterations and pets

Changes to the property

You may be able to decorate or make minor improvements, but more significant alterations often require permission from the housing association.

Pets and day-to-day living

Pet rules can vary by lease. If pets are part of your plans, checking the lease terms before moving in is sensible.

Alternatives to Shared Ownership

Shared Ownership isn’t the only way first-time buyers may access a more affordable route into home ownership. Depending on where you live and your circumstances, you might also see options such as:

• First Homes (where available)
• Right to Buy / Right to Acquire (for eligible tenants)
• other shared equity or affordability-focused schemes

Comparing the overall cost picture (deposit, monthly outgoings, and long-term flexibility) can help you understand which option best fits your plans.

Shared Ownership and selling your share

If you decide to sell, the process is often different from selling a property you own outright.

In many cases, the housing provider may have first refusal or a role in arranging the sale of your share. Alternatively, a new buyer may be found who can take over the lease and purchase your share at an agreed value.

If you have staircased to 100% ownership, selling is generally more similar to selling any other home, without the housing provider holding the same stake.

Is Shared Ownership right for you?

Shared Ownership may be a good fit if you:

• want to buy sooner than you might be able to on the open market
• are comfortable paying mortgage repayments + rent
• can budget for leasehold-related costs (where applicable)
• understand the practical implications of leasehold and the scheme agreement
• are prepared for the possibility of staircasing costs and longer-term planning

If you’re comparing options, it can help to look beyond the initial deposit and consider how the arrangement could change over the years.

For official guidance, see the Shared Ownership scheme on GOV.UK.