Shared ownership mortgages

Shared ownership is a part buy, part rent route into home ownership. You buy a share of a property, usually between 25% and 75% of its full market value, with a mortgage and a deposit of at least 5% of your share, and you pay rent to a housing association on the share you have not bought¹. Because the mortgage only has to cover your share, the deposit and the monthly payment are smaller than they would be for the whole property, which is why the scheme is aimed at first-time buyers and people who do not currently own a home¹.

The arrangement is a form of ownership, not a tenancy. A shared owner buys the full leasehold title to their home and enters into a lease with the landlord, which states how long the lease runs, what the costs and fees are, and what the homeowner is responsible for⁴. Shared owners own their homes and can therefore be called homeowners³. Over time, most shared owners can buy further shares, a process called staircasing, usually increasing their ownership up to 100%².

How a shared ownership mortgage works

A shared ownership mortgage is a mortgage like any other, but it only covers the share you are buying. You put down a deposit and borrow the rest of the money for your share from a mortgage lender; the housing association, or in some cases a private developer, keeps the remaining share and rents it to you⁷. Each month you make two payments: a mortgage payment to your lender for the share you own, and rent to the landlord for the share you do not⁵. If the home is a flat, monthly service charges usually apply on top⁹.

The legal side matters, because it is what makes you the homeowner rather than a tenant. The lease is a legal contract with the housing association that makes the shared owner the homeowner and sets out how long the lease is for, what the costs and fees are, and the responsibilities of the homeowner³. A shared ownership lease provides similar rights to an ordinary long residential lease, though there are some differences¹⁰. In Scotland the arrangement works through a shared ownership agreement rather than an English-style lease, and the rent is called an occupancy charge¹¹.

Lenders are willing to lend on these homes because the standard shared ownership lease contains a protection for them. The landlord agrees that if the leaseholder defaults, the landlord will compensate the lender for some part of any loss if the sale proceeds of the leaseholder's share are insufficient, which is why mortgage indemnity insurance is not required; the lender does need the landlord's consent to the mortgage terms¹². Lenders who provide shared ownership mortgages also require the landlord to confirm that it will notify them before taking any steps using Ground 8, the possession ground that applies to rent arrears¹⁰.

Your monthly outgoings under shared ownership, from deposit to service charges

Buying a share: usually between 25% and 75%

The size of the share is usually between 25% and 75% of the property's full market value¹. Independent guides describe the same range: buyers typically pay somewhere between 25% and 75% of the full market value on an initial purchase³, and the scheme is described as buying a share of between 25% and 75% and paying rent on the remainder¹³. The share you take is based on what you can afford, and the smaller the share, the smaller the mortgage and deposit, but the larger the rent.

Some variants of the scheme use a wider range. The Right to Shared Ownership scheme, which allows some tenants in England to buy a share of the home they rent, lets you buy a share of between 10% and 75% of your home's full market value⁹, and official evaluation material describes shared ownership as offering shares between 10% and 75%¹⁵. The Older Persons Shared Ownership scheme also allows a share between 10% and 75%, based on your individual financial circumstances¹⁶.

In Scotland, shared ownership works in fixed steps: you can buy a 25%, 50% or 75% share of a home¹¹. Wales runs shared ownership on the same part buy, part rent principle: you buy a share in the home and pay rent on the remaining share you do not own¹⁷.

The deposit is worked out on your share, not the whole property. Shared ownership homes can be purchased with a deposit of at least 5% of your share of the property, with a mortgage covering the rest². Under the Right to Shared Ownership scheme the deposit is usually between 5% and 10% of the share you are buying⁹. This is the feature that makes the scheme reachable for many buyers: a 5% deposit on a 25% share of a property is far less cash than 5% of the full price. How much you can borrow overall is covered in how much can I borrow, and the deposit rules are explained in loan to value.

Rent on the share you don't own

The rent is the ongoing cost of the share you have not bought, and it is paid to the housing association or private developer that owns the building⁷. The lease calls this monthly payment the specified rent, and it is due in lieu of paying the full 100% price for the property at the outset; the monthly rental amount can be reduced if the shared owner buys further shares³. The rent payment detailed in the lease covers the landlord's cost of financing the percentage value of the property that the shared owner has not yet paid for⁴. In Scotland, the rest of the home is owned by a housing association and you pay them an occupancy charge to live in it¹¹.

How much the rent is depends on the lease. As an illustration from the Right to Shared Ownership guidance: for a home valued at £400,000 with a 40% stake and rent set at 2.75%, the first year's rent is £6,600, or £550 a month¹⁸. Your own figure will be set out in your lease and in the key information document you receive before buying.

Rent is not the only regular cost. As a leaseholder you usually pay monthly service charges for the building⁹, and if the property is a flat in Scotland you may have shared maintenance charges or factor fees¹⁹. Help with the rent may be available: if you buy a share of your home through a shared ownership scheme but still pay rent, you can get Housing Benefit during this time²⁰, and shared ownership properties can qualify for Support for Mortgage Interest alongside help with rent²¹. If money becomes tight, some shared ownership schemes offer flexible tenure, where you sell back some of your ownership to your landlord to reduce your mortgage payments²².

Who can buy a shared ownership home

The standard scheme gives first-time buyers and those who do not currently own a home the opportunity to purchase a share in a property¹. Shared ownership can act as a bridge to home ownership for those on lower incomes²³, and in Scotland the scheme is described as being for people whose income is low¹¹.

Some variants have wider or different eligibility. The Older Persons Shared Ownership scheme accepts people who are first-time buyers, used to own a home but cannot afford to buy one now, are forming a new household, are existing shared owners wanting to move, or own a home and want to move but cannot afford a new home that meets their needs¹⁶. The Right to Shared Ownership is available to tenants living in social and affordable rent homes funded through the current affordable homes programme, and lets them buy their rented home on shared ownership terms²⁴.

Shared ownership homes in England are offered by many organisations, including housing associations, local councils and homebuilders⁶, and the schemes are usually run by housing associations⁵. Shared Ownership accommodation is provided by housing associations¹. To find a home, you can search for an organisation that sells shared ownership homes in your area⁶. Getting a mortgage in principle before you start viewing helps you know what share you can afford, and a mortgage broker or adviser can check which lenders lend on the homes you are looking at.

Not every lender offers shared ownership mortgages

Because the security for the loan is a shared ownership lease rather than a straightforward freehold or leasehold property, only some lenders lend on these homes. The lender needs the landlord's consent to the mortgage terms, and it relies on the lease's mortgagee protection provisions, under which the landlord compensates the lender for part of any loss if the leaseholder defaults and the sale proceeds of their share are insufficient¹². Lenders also require the landlord to confirm it will notify them before taking any steps using Ground 8¹⁰. These requirements mean the market is narrower than for ordinary mortgages, and some lenders that lend on shared ownership do so only through brokers, while specialist lenders also operate in this part of the market.

For the buyer, the practical effect is that you may have fewer deals to choose from, and the housing association selling the home can often tell you which lenders have lent on its properties before. The mortgage itself is then regulated like any other: mortgage contracts, including first and second charge mortgages, fall within the FCA's mortgage rules²⁵, so the protections described in mortgage rules, your rights and protection apply to a shared ownership mortgage in the same way as to any other.

Fixed or variable rate: the options lenders offer

Once a lender has agreed to lend on a shared ownership home, the choice of rate type is the same as for any mortgage. Most borrowers choose a fixed rate: of residential mortgages available in June 2025, 90% offered a fixed rate²⁶. A fixed rate keeps the mortgage payment on your share the same for the deal period, which sits alongside a rent that is set by the lease, while a tracker rate moves with the Bank Rate and a standard variable rate moves at the lender's discretion.

The one difference worth noting is that your total monthly outgoings have two moving parts. The rent on the unowned share is set by the lease and does not move with interest rates, while the mortgage payment on your share moves with the rate you choose. A fixed rate therefore fixes only part of your monthly cost. How the different rate types behave, and what happens when a fixed rate ends, is covered in the dedicated pages on fixed rate mortgages and what to do when your fixed rate ends.

Fees and charges

The costs of buying through shared ownership fall into three groups: the deposit, the buying costs, and the ongoing charges. The deposit is at least 5% of your share of the property², or usually between 5% and 10% of the share under the Right to Shared Ownership scheme⁹. On top of the deposit 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 duty²⁷. Because these costs apply to your share, they are proportionally smaller than for a full purchase.

The ongoing costs are the mortgage payment, the rent on the unowned share⁵, and usually monthly service charges under the lease⁹. For flats in Scotland, shared maintenance charges or factor fees may apply¹⁹. Before you commit, the provider must give you a key information document setting out the fees and charges for the specific home, and the lease states what the costs and fees are³. The general costs of taking out a mortgage, such as arrangement fees and valuation and survey fees, are covered in mortgage fees and charges.

One responsibility worth checking before buying: shared ownership customers are responsible for paying for major structural works within their home, because as the leaseholder they have purchased the full leasehold title⁴. This is a real difference from renting, where the landlord bears repair costs, and it is one reason to read the key information document carefully.

Remortgaging needs the landlord's agreement

Remortgaging a shared ownership home is possible, but it involves three parties rather than two: you, your new lender, and the landlord. The lender needs the landlord's consent to the mortgage terms, because the mortgagee protection in the lease has to apply to the new loan¹². In practice, lenders that offer shared ownership mortgages will usually deal with the housing association directly, but it is worth confirming with the landlord that it will consent before you spend money on an application.

In Scotland, the position on shared equity properties is set out plainly: you may re-mortgage your property at any time²⁹. For shared ownership under an Exclusive Occupancy Agreement, check your own documents, because your agreement might have a clause meaning you have to offer the home to the housing association to buy back first in some circumstances³⁰.

When a fixed or introductory rate ends, shared owners have the same two options as any other borrower: a product transfer with the existing lender, or a full remortgage to a new lender. A product transfer avoids the need for the landlord's consent to be revisited, since the loan stays with the same lender, while a remortgage to a new lender means the new lender must be satisfied with the lease. The comparison is set out in remortgage or product transfer. If you are struggling with payments, shared ownership properties can qualify for Support for Mortgage Interest alongside help with rent²¹, and if repossession is threatened, a shared equity or shared ownership property can be considered for the Mortgage to Rent scheme in Scotland³¹.

Staircasing: buying more of your home over time

Staircasing is the process of buying further shares in your home, and it is built into most shared ownership leases. The lease refers to it as a further payment to the landlord for a further percentage of the value of the property, which reduces the monthly rental amount³. After becoming a shared owner, you can buy more shares in the property, usually increasing ownership up to 100%². In some cases the shared owner may be able to purchase 100% of the property, which is referred to as final staircasing³.

The rules on when and how you can staircase depend on where you are and which version of the scheme you bought through:

• In Scotland, after you have been living there for a year, you can buy a larger share of your home if you want to⁵.
• Under the new national model for shared ownership in England, new shared owners can buy additional shares in their home in 1% increments for up to 15 years, with heavily reduced fees³².
• Under the House Sales Scheme in Northern Ireland, you can increase your equity share in multiples of five per cent at any time³³.
• The Older Persons Shared Ownership and HOLD schemes both allow you to buy more shares in future, and if you buy more shares, you will pay less rent¹⁶.

How ownership typically builds up over time under shared ownership

There is one important limit. Some shared ownership homes in designated protected areas are sold with 80% restricted staircasing, meaning ownership is capped at 80% and final staircasing to 100% is not available³⁵. Whether a home carries this restriction is stated in its key information document, so check before you buy if owning the whole property eventually matters to you.

Each staircasing step has costs of its own: the share is valued, and you pay legal and valuation fees, though under the new national model these fees are heavily reduced for the 1% increments³². Buying a further share can be done with savings or by borrowing more on your mortgage, which is covered in borrowing more on your mortgage. The effect on your monthly costs is the mirror image of the first purchase: the mortgage payment rises because you are borrowing more, and the rent falls because less of the property is owned by the landlord³.

Key information documents: what you are given before buying

Key information documents, or KIDs, are standard documents given to prospective buyers of shared ownership homes funded through Homes England's Shared Ownership and Affordable Homes Programme 2016 to 2021²⁸. They exist in separate suites for standard shared ownership homes²⁸, for Older Persons Shared Ownership homes³⁶, and for shared ownership homes in a designated protected area with 80% restricted staircasing³⁵. The standard suite may also be adapted for older shared ownership homes delivered under previous affordable homes programmes²⁸.

The purpose of the KID is to put the terms of the deal in front of you before you commit: the share you are buying, the rent, the fees, the staircasing rules and your responsibilities as a leaseholder. For more information and guidance on the KIDs, Homes England points readers to its Capital Funding Guide, Shared Ownership chapter, section 11²⁸. Alongside the KID, the lease itself states how long the lease is for, what the costs and fees are and the responsibilities of the homeowner³, and a conveyancer should explain both. The documents you receive when a mortgage is agreed, including the ESIS illustration of the loan, are covered in the ESIS illustration.

Other schemes: older buyers, HOLD, Scotland and Northern Ireland

Several schemes sit alongside standard shared ownership, each aimed at a particular group.

Older Persons Shared Ownership (OPSO) follows the same rules as the shared ownership scheme, with the share you can buy based on your individual financial circumstances and between 10% and 75% of the home's full market value¹⁶. Buyers who already own a home must have formally accepted an offer for its sale, with written confirmation of the sale agreed, and the sale must complete on or before completion of the shared ownership purchase¹⁶.

Home Ownership for people with a Long-term Disability (HOLD) lets you buy a shared ownership home on the open market, rather than one offered through a scheme, when no suitable shared ownership property is available. Homes can be second-hand or new build. The process is to discuss your situation with your chosen shared ownership provider, then search for a home on the open market; the provider checks you can afford the home and the property, and then you find a legal professional for conveyancing³⁴.

Right to Shared Ownership allows some tenants in England to buy a share of their rented home on shared ownership terms, buying a share of between 10% and 75% of its full market value, paying rent to the landlord on the rest and usually paying monthly service charges⁹. It is available to tenants living in social and affordable rent homes funded through the current affordable homes programme²⁴.

Scotland runs shared ownership with shares of 25%, 50% or 75%, paying an occupancy charge to the housing association on the rest¹¹. Scotland also has shared equity schemes, which work differently: with shared equity you usually need to buy at least a 60% share of the home⁵, and under the Open Market Shared Equity scheme you pay for the biggest share, usually between 60% and 90% of the home's cost, with the Scottish Government holding the rest³⁷. A lender may expect you to provide a modest deposit to obtain a shared equity mortgage³⁸. The differences between the two countries' schemes are covered in mortgages in Scotland.

Northern Ireland operates equity sharing through the House Sales Scheme, under which you can increase your equity share in multiples of five per cent at any time, known as staircasing³³. Wales runs shared ownership as a part buy, part rent scheme: you buy a share in the home and pay rent on the remaining share you do not own¹⁷, and the Welsh schemes are covered in mortgages in Wales.

It is also worth knowing what shared ownership is not. The First Homes scheme offers new homes at a discount to first-time buyers, and unlike shared ownership there is no rent to pay³⁹. Shared ownership is also distinct from sale-and-rent-back style arrangements: it is a government-backed scheme under which you buy a share of the property and pay rent to a landlord for the share they own⁸.

Where your protection comes from

Your mortgage is regulated in the same way as any other. Mortgage contracts fall within the FCA's mortgage sourcebook, which governs how lenders must treat you from application through to arrears²⁵. If something goes wrong with the mortgage, the Financial Ombudsman can consider complaints about mortgage lending, including disputes over arrears charges²⁵.

Your rights as an owner come from the lease. A shared ownership lease provides similar rights to an ordinary long residential lease, though there are some differences¹⁰, and the lease states your costs, fees and responsibilities³. The responsibilities run both ways: you are the homeowner, responsible for major structural works within your home⁴, but the landlord's ability to act on rent arrears is constrained by the requirement to notify your lender before taking any steps using Ground 8¹⁰.

If you cannot keep up the payments, help exists at both ends of the problem. Shared ownership properties can qualify for Support for Mortgage Interest alongside help with rent²¹, and Housing Benefit can be claimed during the period when you own a share but still pay rent²⁰. In Scotland, buyers of shared ownership or shared equity houses may be considered for the Mortgage to Rent scheme, under which a housing association buys the home and rents it back to you⁴⁰, although you cannot join the Mortgage to Shared Equity scheme if you have bought a shared ownership or shared equity house⁴¹. Free, impartial help with mortgage problems is available from debt advice charities, and the steps a lender must take before repossession are covered in mortgage arrears.