What is Shared Ownership? Step onto the Property Ladder
By TMG | 10th June 2025
Shared Ownership Mortgages: A Smarter Way to Step onto the Property Ladder
For many aspiring homeowners, the dream of owning a home can feel out of reach, especially in today’s property market. Rising house prices, higher living costs, and tough deposit requirements make saving for a traditional mortgage challenging. But what if there was a more accessible route to homeownership?
Enter Shared Ownership Mortgages—a flexible, government-backed scheme designed to help people get on the property ladder sooner and with greater financial ease.
What Is a Shared Ownership Mortgage?
A Shared Ownership Mortgage is a part-buy, part-rent scheme primarily aimed at first-time buyers or those who don't currently own a home. You buy a share of a property (usually between 25% and 75%), and pay rent on the remaining share, which is owned by a housing association.
You’ll still need a mortgage to buy your share, but since the loan is for a smaller amount than a traditional mortgage, your deposit and monthly repayments are typically lower.
How Does It Work?
Choose a share: You buy an initial share of the property, which you can afford based on your income and savings.
Secure a mortgage: You’ll get a mortgage for the share you’re buying—say 40% of the property’s value.
Pay rent: You pay a subsidised rent on the remaining 60% to the housing association.
Monthly outgoings: These include your mortgage, rent, and any service charges or maintenance fees.
Who Is Eligible?
You may qualify if:
You’re a first-time buyer, or
You used to own a home but can’t afford to buy now, or
You’re an existing shared owner looking to move.
Income caps apply:
Up to £80,000 per year outside London
Up to £90,000 within London
Certain properties are also available for key workers, those with disabilities, or people in specific housing need.
Pros of Shared Ownership
Lower deposit: Since you’re only buying a portion, your deposit is based on your share, not the whole property value.
Affordable entry: It’s a realistic step into homeownership without needing a huge mortgage or income.
Stair casing: You can increase your share over time as your finances improve.
Stability: Unlike renting, you build equity and have more long-term security.
Things to Consider
Rent + mortgage + fees: Make sure you factor in all monthly costs, not just the mortgage.
Limited property choices: You can only buy properties that are part of the Shared Ownership scheme.
Resale rules: When you want to sell, the housing association may have the right to find a buyer before you put it on the open market.
Leasehold: Most shared ownership properties are leasehold, so be aware of lease terms and service charges.
Source:
Share to buy 2025, Share Ownership. Available at: https://www.sharetobuy.com/shared-ownership/ (Accessed date 10/06/2025)
