Shared Ownership or Shared Equity: How They Differ

Shared ownership and shared equity are two different ways of buying a home when you cannot fund the whole price yourself. The names sound alike, and people often use them interchangeably, but the money works in opposite directions. With shared ownership you buy part of a home and pay rent on the rest. With shared equity you normally own the whole property in your name, funded by a mortgage plus a government equity loan, and you pay no rent on that loan.

The share you buy under shared ownership is usually between 10% and 75% of the home's full market value, and you pay rent to a housing association on the share you have not bought¹. Shared equity schemes work differently: the property is fully in your name, and the equity loan covers part of the cost alongside your mortgage². Shared equity schemes operate mainly in Scotland, Wales and Northern Ireland, while shared ownership is the main route in England.

Both routes reduce the deposit and mortgage you need at the start. Shared ownership homes can be bought with a deposit of at least 5% of your share of the property, not the full price, and a mortgage to cover the rest of that share³. The sections below set out what each one costs, who can apply, and what happens when you sell.

What each scheme actually is

Shared ownership means you buy a share of the property and then pay rent to a landlord for the share they own. It is also called part-buy part-rent, and it is a government-backed scheme⁶. The rest of the home is owned by a housing association, and you pay them an occupancy charge to live in it⁷. Shared ownership accommodation is provided by housing associations⁸.

Shared equity is a type of home ownership where the purchaser benefits from an equity loan provided by the Scottish Government and administered by an authorised agent⁹. In Scotland there are two shared equity schemes: the New Supply scheme and the Open Market scheme². The key difference from shared ownership is that the property is fully in your name, and you do not pay rent on the equity loan².

The two models also differ in how much of the home you own outright from day one. Under shared ownership, the greater the share you buy, the less rent you pay to your housing association, and at 100% no rent is paid at all⁵. Under shared equity, you own the whole property legally from the start, but the government holds a stake that you repay when you sell or when you choose to pay it off.

Fees, charges and eligibility

The costs of each route differ in where they land. With shared ownership, you pay a mortgage on your share, rent on the rest, and usually a service charge for things like cleaning shared areas⁴. You are also responsible for paying your mortgage, factors costs, home contents insurance, building insurance, repairs and maintenance, council tax, heating, lighting and water bills, and fittings and furniture¹⁰.

With shared equity, you pay for your share of the home's price in the usual way, along with other costs like legal costs, registration fees and any stamp duty¹¹. As a shared equity owner, all factoring charges are your responsibility and should be taken into account before you go ahead, and all maintenance costs must be met by you¹². You are also required to ensure that you have obtained adequate insurance for the property¹².

Eligibility also differs. Shared ownership is aimed at first time buyers and those who do not currently own a home⁸. In England, outside London, the combined household income of applicants must be less than £80,000⁴. There is a different scheme available for people aged 55 and over⁴. For shared equity in Scotland, you need to have some equity in your property to be eligible for a shared equity loan¹³.

Staircasing: buying more of your home

Shared ownership offers the person the opportunity over time to increase their share within the property, known as staircasing, and eventually own the property in full¹⁴. After becoming a shared owner, you can buy more shares in the property, usually increasing to up to 100%⁵. Around 4,000 to 5,000 shared owners a year staircase to full ownership⁵.

The current model has made staircasing more flexible. There is an option to staircase in 1% increments per year for 10 years without undertaking a valuation, and other staircasing transactions are reduced to a minimum of 5% rather than 10%⁵. When staircasing, the extra share you buy will need to be valued at that given time⁴. You will need the permission of the company that owns the rest of the home⁴.

Shared equity schemes also allow you to increase your stake, though the mechanics differ. Under the Open Market Shared Equity scheme, you pay all the valuation and legal costs as well as the administration costs of the organisation that will handle the request¹⁵. The Scottish Government publishes guidance on increasing your share in an Open Market Shared Equity home¹⁵.

Repairs, service charges and who pays for what

One of the most misunderstood parts of shared ownership is who pays for repairs. The lease makes the shared owner the homeowner, and they are responsible for all the repairs and maintenance in their home, including major structural works and major repairs¹⁶. Shared owners agree to pay for the full costs of repairs and maintenance¹⁶. This is the case with all leasehold properties, where the sharing of cost is stipulated in the lease¹⁶.

For flats, the cost of external repairs will be divided between you and the other flat owners in the building if the reserve fund does not cover the cost¹⁷. If you are a shared owner, your cap on leaseholder contributions is reduced in proportion to your equity in the property¹⁸. Housing associations contribute up to £500 a year towards certain repairs and maintenance costs in the first 10 years of ownership, and this contribution can be rolled over for one year⁵.

Shared equity owners carry similar responsibilities. All maintenance costs must be met by you, the shared equity owner, and all factoring charges are your responsibility¹². Under the Mortgage to Shared Equity scheme, you will have responsibility for all maintenance, insurance and repair costs, as well as making your mortgage payments and paying council tax, plus common maintenance or service charges where applicable¹⁹.

Selling, moving on and what you get back

If a shared owner's home increases in value over a number of years, they will receive this additional equity if they sell²¹. You can sell at any time, but if you own less than 100%, you will need to tell the company that owns the rest when you want to sell⁴. You cannot rent it out or keep it; you will need to sell your share if you want to leave⁴.

Shared equity works differently on sale. Under the Open Market Shared Equity scheme, you pay all the valuation and legal costs as well as the administration costs of the organisation that will handle the request¹⁵. The Scottish Government publishes post-sale information for buyers covering what happens after you buy through a shared equity scheme¹².

There is a further difference in how the two models treat ownership status. Shared owners own their homes and can therefore be called homeowners²². The scheme offers the person the opportunity over time to increase their share within the property and eventually own the property in full¹⁴. But the shared ownership lease is not an assured shorthold tenancy, and it is not simply another form of renting²⁰.

Help with costs and benefits

If you have a shared ownership tenancy, your housing costs payment can also include an amount for your rent²³. Shared ownership schemes are treated as Social Rented Sector cases and housing costs are based on the rent and any eligible service charges⁸. The size criteria is not applicable to shared ownership cases, which means the removal of the spare room subsidy does not apply⁸. Where applicable, any Housing Costs Contributions will continue to apply⁸. Any mortgage in shared ownership cases will be subject to Support for Mortgage Interest rules⁸.

For shared equity, the position is different. You cannot join the Mortgage to Shared Equity scheme if you have bought a shared ownership or a shared equity house²⁴. To be eligible for a shared equity loan, you will need to have some equity in your property¹³. You are required to meet any costs you incur such as legal fees or charges imposed by lenders²⁵.

If you fall behind on payments, the consequences are serious. If a shared owner does not pay their rent, the shared owner would lose their interest in the property and ownership would return in full to the landlord²⁶. Any cost incurred by the lender in doing this will be added to the monies owed by the shared owner to its mortgage lender²⁶. Free, impartial help is available from MoneyHelper, and debt advice charities such as StepChange and National Debtline can advise on mortgage and rent arrears²⁷.

Service and complaints

Shared ownership sits within the leasehold framework, which shapes how complaints work. A shared ownership lease provides similar rights to an ordinary long residential lease but there are some differences²⁰. The shared owner has the same benefits and rights in relation to the common parts as any other leaseholder¹⁶. The lease makes the shared owner the homeowner, and they are responsible for all the repairs and maintenance in their home, including major structural works and major repairs¹⁶.

If something goes wrong with a shared ownership or shared equity product, the Financial Ombudsman Service handles complaints. In the first quarter of 2026/27, the ombudsman opened 27 complaints about Help to Buy and Shared Equity Loans²⁸. In the first quarter of 2025/26, it opened 38 complaints about Help to Buy and Shared Equity Loans, of which 62% were upheld²⁹. Across the full year 2025/26, it opened 110 complaints about Help to Buy and Shared Equity Loans, of which 64% were upheld³⁰.

These figures cover complaints about the financial products, not about the condition of the home or the behaviour of a landlord. For disputes about repairs, service charges or the management of a shared ownership building, the route is usually the housing association's own complaints process first, then the relevant ombudsman for housing.

Protection for your money

The protections that apply depend on which scheme you use and what you are protecting. Shared ownership is a government-backed scheme, and shared ownership accommodation is provided by housing associations⁸. The Right to Shared Ownership allows eligible social housing tenants to purchase their social or affordable rented home on a part-buy part-rent basis, buying a percentage of the property and paying a reduced rent on the rest to a housing association³¹. Under the Right to Shared Ownership, you can buy an equity stake in your home worth between 10% and 75% of its full market value³².

For shared equity, the equity loan is provided by the Scottish Government and administered by an authorised agent⁹. The property will be fully in your name². You will still own your home and be responsible for maintaining and insuring it³³. You are also required to ensure that you have obtained adequate insurance for the property¹².

Where protection stops is important to understand. Shared ownership and shared equity are not savings products, and the Financial Services Compensation Scheme does not cover the value of your home or your equity. The FSCS protects deposits in banks, building societies and credit unions, and its protection tool assumes a joint account with two account holders, each with an equal share³⁴. That protection applies to money held in accounts, not to property.

If you are buying with someone else and the arrangement ends, the rules differ by nation. In England and Wales, money in joint accounts belongs to whoever paid it in, but a non-contributing partner could claim a share if they prove the account was intended as a shared fund; if married or in a civil partnership, money belongs to both equally³⁵. In Northern Ireland, money in a joint savings account post break-up belongs to each of you equally, unless a court decides differently³⁵.