Shared Ownership Scheme: A Smart Way to Step onto the Property Ladder

At Friends Capital, we often speak to people who feel priced out of the housing market. The good news? There are government-backed schemes designed to help, and the Shared Ownership Scheme is one of the most popular. It can be a stepping stone towards full home ownership without needing a hefty deposit or massive mortgage.

If you’ve ever thought, “I’ll never afford a home of my own”, this guide is for you. We’ll walk you through everything you need to know: how the scheme works, who qualifies, the pros and cons, and how we can help you get started.

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What Is the Shared Ownership Scheme?

The Shared Ownership Scheme allows you to buy a share of a property (between 10% and 75%) and pay rent on the remaining portion, which is owned by a housing association or local council. Over time, you can choose to buy more shares in the property – a process known as staircasing – until you own it outright.

It’s a great option if you:

Have a steady income but cannot afford to buy a home outright
Want to live in areas where house prices are typically higher
Are struggling to save a large deposit

You’ll need a mortgage for the share you purchase and will pay a reduced rent on the rest.

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Key Features of the Shared Ownership Scheme

Here’s how it works in practice:

You buy between 10% and 75% of the property’s value.
You pay subsidised rent on the remaining share.
You can staircase to buy more of the property later (often up to 100%).
Deposit requirements are lower, based on the value of your share rather than the full property.
You must live in the property, making it ideal for first-time buyers.

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Who Is Eligible?

The Shared Ownership Scheme isn’t just for first-time buyers, but it is aimed at people who would otherwise struggle to buy on the open market.

You may qualify if:

Your household income is £80,000 or less (£90,000 or less in London)
You’re a first-time buyer, or a previous homeowner who can no longer afford to buy now
You are currently renting a council or housing association property
You have a good credit history and can afford the regular costs (mortgage, rent, service charges)

Shared Ownership homes are usually leasehold properties – this is important to understand when considering long-term costs like ground rent or service charges.

How Much Does It Cost?

Let’s break it down with an example.

Imagine you’re buying a Shared Ownership property valued at £240,000:

You choose to buy a 40% share = £96,000
You’ll need a mortgage for £96,000 and a deposit (typically 5–10%) based on that share – so between £4,800 and £9,600
You pay rent on the remaining 60% = £144,000. This is typically set at 2.75% of the value per year, so approximately £330/month
Service charges and ground rent may also apply, especially if it’s a flat

Your total monthly costs might look like this:

Mortgage repayment: £450
Rent to housing association: £330
Service charge: £100
Total: £880 per month

This is often more affordable than paying rent in the private market or getting a full mortgage.

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Staircasing: Buying More of Your Home Over Time

One of the biggest benefits of Shared Ownership is that you can gradually increase your share in the property.

This process is known as staircasing. You can usually do this in 10% increments, and every time you staircase, your rent reduces because you now own a larger share.

Eventually, many people staircase to 100% ownership, at which point you no longer pay rent. You may still pay service charges if your home is leasehold.

Things to bear in mind:

Staircasing comes with legal and valuation fees
The price of additional shares is based on the current market value, not the original price
Some housing providers limit full ownership in certain rural or protected areas

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Pros and Cons of the Shared Ownership Scheme

Advantages

Lower deposit required: Based on your share, not the full value
More affordable: Combines renting and owning
Entry to the housing ladder: Without needing six figures in savings
Flexible ownership: Staircase at your own pace
Security of tenure: You’re a leaseholder, not just a tenant

Disadvantages

You still pay rent: Which increases over time, especially if you don’t staircase
Leasehold limitations: Ongoing service charges and potential restrictions
Resale can be tricky: You must often sell through the housing association first
Additional costs: Staircasing and reselling involve solicitor and valuation fees
Availability is limited: Especially in certain rural areas or competitive housing markets

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Who Is It Best Suited For?

In our experience at Friends Capital, Shared Ownership is ideal for:

Young professionals who want a foot on the ladder but don’t have a large deposit
Single-income households struggling to find affordable homes
Key workers looking to live near their place of work
Families with limited savings who want long-term security

If you know you want to eventually own your home outright but need time to get there, Shared Ownership gives you that pathway.

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What Types of Homes Are Available?

Shared Ownership homes come in all shapes and sizes, including:

New-build flats and houses
Resales of existing Shared Ownership homes
Some adapted homes for people with disabilities

Many homes are prioritised for local residents, key workers, or those with specific needs. New-builds are often the most common, but resale properties may offer better value in some areas.

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Can You Sell a Shared Ownership Home?

Yes, but there are a few rules to follow.

You must inform the housing association first – they usually have 8 weeks to find a buyer
If they can’t sell it, you can list it on the open market
If you own 100%, you can sell it like any normal property

The price will be based on the market value of your share, which may go up or down over time.

Selling a Shared Ownership home can take a little longer due to these extra steps, but it is perfectly doable – and we can help guide you through it.

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Things to Watch Out For

Before committing, be sure to:

Check the terms of your lease – especially service charges and staircasing conditions
Review the rent increase formula – typically linked to inflation plus 0.5–2%
Understand how staircasing works and what it will cost long-term
Know your responsibilities as a leaseholder, including maintenance and repairs in most cases

At Friends Capital, we always recommend getting independent legal advice before signing.

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How Friends Capital Can Help

We’ve helped many first-time buyers secure their first home through Shared Ownership.

Here’s how we support you:

Initial affordability checks to see if Shared Ownership is right for you
Mortgage advice tailored to your share and deposit
Liaison with housing associations to make the process smoother
Guidance through staircasing if you choose to increase your share later
Support when reselling your Shared Ownership home

We understand this process inside out, and we’ll break down the jargon so you feel confident every step of the way.

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Final Thoughts

The Shared Ownership Scheme is a powerful tool for those who want to get on the property ladder but are struggling with affordability. While it comes with some complexities, the benefits can outweigh the drawbacks if you go in with your eyes open.

At Friends Capital, our job is to make that journey easier. Whether you’re buying your first home, planning to staircase, or wondering if Shared Ownership is right for you, we’re here to help with honest advice and tailored support.

Ready to explore your options?
Get in touch today and speak to one of our friendly mortgage advisers.

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