Shared ownership is a government-backed scheme that allows buyers to purchase a share of a property — between 10% and 75% — and pay rent to a housing association on the portion they do not own. It is designed to make homeownership accessible to people who cannot afford to buy outright in the areas where they want to live, with the option to increase their share over time through a process called staircasing.
In London, where average property prices sit at around £554,000, shared ownership has become a significant route onto the property ladder. The deposit is based only on the share purchased, the mortgage is smaller, and the scheme gives access to areas that full ownership would price out entirely.
But shared ownership is more complicated than it first appears. The monthly cost structure, the leasehold obligations, the restrictions on selling, and the true cost of staircasing all deserve careful examination before committing. This guide covers all of it.
How Shared Ownership Works
When you buy a shared ownership property, you are buying a leasehold share of the property from a housing association. You pay a mortgage on the share you own and rent to the housing association on the share you do not own.
Your monthly costs include:
- Mortgage payment — on the share you have purchased
- Rent — to the housing association on their remaining share, typically calculated at 2.75% per year of the unsold share’s value
- Service charge — covering maintenance of communal areas, building insurance, and management costs
- Ground rent — on some older leases (though new leases from June 2022 cannot charge ground rent under the Leasehold Reform Act)
The combination of these costs is frequently higher than buyers expect when they focus only on the headline deposit and mortgage figure. Always model all four costs together before assessing affordability.
Who Is Eligible for Shared Ownership
To qualify for shared ownership in England in 2026:
- Your household income must be £80,000 per year or less outside London, or £90,000 or less in London
- You must be a first-time buyer, or a previous homeowner who can no longer afford to buy outright
- You must be unable to purchase a property suitable for your needs on the open market
- Some schemes prioritise key workers — NHS staff, teachers, police officers — particularly in London
Existing housing association or council tenants may also be eligible in some cases. Specific developments may have additional local connection or occupational requirements. Check eligibility against the specific scheme rather than the general rules alone.
Staircasing: Buying More of Your Home Over Time
Staircasing is the process of buying additional shares in your property, increasing your ownership percentage up to 100%. It is one of the main selling points of shared ownership — the promise of a route to full ownership over time.
The rules depend on which model your lease uses:
New model (homes funded from April 2021 onward):
- You can staircase in 1% increments per year for the first 15 years, priced using the House Price Index rather than a new RICS valuation
- You can staircase in larger amounts (5% or more) at any time, based on current market valuation
- Each 1% staircase under the new model reduces your rent accordingly and does not require an administration fee from your housing association
Old model (homes purchased before April 2021):
- Minimum staircase of typically 10% or 25% depending on the lease
- Each staircase based on current RICS valuation
- Administration fees apply
The staircasing cost to understand clearly: when you staircase in blocks of 5% or more, the price is based on the current market value of the property — not the price you originally paid. If your property has risen in value since you purchased, each additional share costs more than it would have at the outset. On a property originally worth £300,000 that has risen to £360,000, buying a further 25% share costs £90,000 — not the £75,000 it would have cost at purchase.
This means that in a rising market, staircasing can become progressively more expensive over time, potentially making full ownership more difficult rather than easier. This is one of the most important and least discussed aspects of shared ownership.
Selling a Shared Ownership Property
Selling a shared ownership property before you have staircased to 100% is more restricted than a standard sale.
Your housing association holds a nomination period — typically 4 to 8 weeks depending on the lease — during which they have the right to find a buyer before you can sell on the open market. This limits your buyer pool to people who are eligible for shared ownership and can secure a shared ownership mortgage, which is a smaller pool than the open market.
Your sale price is based on a RICS valuation, not on what you paid, and you benefit from any increase in the property’s value proportional to your share. Once you have staircased to 100%, you can sell like any other homeowner — full market sale, no nomination period, full buyer pool.
The Honest Assessment: Advantages and Disadvantages
The genuine advantages:
- Lower deposit than buying outright — the deposit is based on the share you purchase, not the full property value. A 10% deposit on a 25% share of a £300,000 property is £7,500 rather than £30,000.
- Access to areas that full ownership would price out entirely — in London particularly, shared ownership enables purchase in locations otherwise inaccessible on a given income
- Security of ownership rather than renting — your home is yours for the lease term, you benefit from value increases on your share, and you cannot be evicted without legal process
The genuine disadvantages:
- Monthly costs are often higher than they look — rent plus mortgage plus service charge combined can exceed what renting a similar property would cost, particularly in the early years
- Staircasing costs rise with property values — in a rising market, full ownership may cost more in total than buying outright at the start
- Resale restrictions limit flexibility — you cannot simply sell to whoever you want while below 100%, and the nomination period can slow a sale
- All shared ownership properties are leasehold — with the obligations, service charges, and potential complications that leasehold involves
The London Context
In London, shared ownership is most widely used for new-build flats in outer boroughs and regeneration areas. The income cap of £90,000 means it targets buyers who are earning reasonably well but still cannot bridge the gap to full ownership at London prices.
The practical question for any London shared ownership buyer is whether the total monthly cost — mortgage plus rent plus service charge — is materially lower than renting a comparable property privately. If it is, shared ownership provides both affordability and equity building. If the costs are comparable and the flexibility is lower, the case weakens.
For the official shared ownership eligibility and scheme guide, check: GOV.UK — shared ownership scheme
For finding shared ownership properties in London and across the UK, check: Share to Buy — shared ownership portal
Conclusion
Shared ownership is a genuine and useful route onto the property ladder for buyers who cannot afford to purchase outright in their target area. The deposit and initial mortgage are lower, the scheme provides real security of tenure, and the option to staircase to full ownership is a meaningful pathway for those whose financial position improves over time.
The costs that need the most careful examination are the combined monthly outgoings, the rising cost of staircasing in a growth market, and the resale restrictions below 100% ownership. None of these are reasons to avoid shared ownership — but all of them need to be modelled honestly before committing.
Frequently Asked Questions
How much deposit do you need for shared ownership?
The deposit is typically 5 to 10% of the share you are purchasing, not the full property value. For a 25% share of a £300,000 property, a 5% deposit is £3,750 and a 10% deposit is £7,500 — significantly less than the deposit required to buy outright.
Can you sell a shared ownership property?
Yes, but with restrictions if you have not yet staircased to 100%. Your housing association has a nomination period — typically 4 to 8 weeks — to find an eligible buyer before you can market on the open market. Once you own 100%, you can sell exactly as you would any freehold or leasehold property.
What is staircasing in shared ownership?
Staircasing is buying additional shares in your property, increasing your ownership from the initial percentage up to 100%. Under new model leases (from April 2021), you can staircase in 1% annual increments or in blocks of 5% or more. The price of each additional share is based on the current market value of the property, not the original purchase price.
