Is Shared Ownership Worth It & Is It Right For You?

Key takeaways

• Shared Ownership lets you buy a share of a home (typically 10-75%) and pay rent on the rest, making it easier to get on the property ladder with a smaller deposit
• You'll need a deposit of just 5-10% of your share, not the full property price, which could make homeownership more accessible
• You can "staircase" to full ownership over time by buying more shares when you can afford it, and your rent decreases as you own more
• All Shared Ownership properties are leasehold, meaning you'll pay 100% of service charges and ground rent even if you only own a share
• It's ideal if you can't save a large deposit or get a big enough mortgage, but it may not suit everyone, especially if leasehold costs are high or you don't plan to stay long-term

What is Shared Ownership?

Shared Ownership is a buying scheme designed to help first-time buyers or people who have previously owned a home but can no longer afford to buy. It works by purchasing a share of a home, normally between 10% and 75%, then paying rent on the rest to a landlord or housing association. The types of homes available through shared ownership include new-build properties, existing homes sold through a Shared Ownership resale scheme, and homes adapted to meet specific needs for those with a long-term disability.

You could take out a mortgage to buy your share, or pay for it with savings. Either way, the deposit required is much smaller than for a standard purchase because it's based on the share being bought, usually between 5% and 10% of that share, not the full property price.

Because the mortgage only needs to cover a portion of the property's value, borrowing costs are lower too. That can make Shared Ownership a great alternative to traditional mortgages for those struggling to get on the ladder.

You will then pay rent to your Shared Ownership provider on the share of the home you don't own. Over time, you can "staircase" up to full ownership by buying more of the property, normally in monthly increments or in lump sums when you can afford it. The good news is that as you buy more shares, your rent decreases because it's based on the landlord's remaining share.

In short, here's how the process works:

1. Choose how much to buy - Pick a share (usually between 10% and 75%) based on what's affordable. The more of the property bought, the less rent is owed.
2. Arrange a mortgage or use savings - A mortgage is only needed for the share being purchased. The deposit is typically 5–10% of that share.
3. Pay rent on the rest - Rent is paid to the housing association or private provider on the portion they still own.
4. Staircase over time - More shares can be purchased when finances allow, reducing the rent owed each time.

Shared Ownership schemes are either run by the government, whereby you'll pay rent to a housing association, or by private providers such as StrideUp, the no-deposit Rent to Own scheme, Wayhome and Your Home.

Some of these schemes are better described as home purchase plans. Because they're mortgage-free, some are certified as Shariah-law compliant, making them a suitable option for Muslim buyers who want to purchase a home in keeping in line with their faith.

Read more: How does Shared Ownership work?

You might also like: What is an Islamic mortgage?

Who is Shared Ownership for?

Shared Ownership is best for buyers who cannot save a big enough deposit, are struggling to get a big enough mortgage to buy the house or apartment they need, or for people who can't use a traditional mortgage. This can include single parents or those who are buying on their own, as well as people who are self-employed. It's also worth knowing that if you already rent from a housing association, there's a separate route called Right to Shared Ownership that lets you buy a share of the home you're already living in.

• Must be at least 18 years old
• Household income no more than £80,000/year (£90,000 in London)
• Must not currently own a home (or be in the process of selling one)
• Must be unable to afford a home that meets their needs on the open market

Private providers (e.g., StrideUp, Wayhome) have their own criteria, so exploring both routes can be worthwhile.

Pros of Shared Ownership

1. Afford a more expensive home or buy in a nicer area

If you're trying to get on the property ladder in a popular corner of the UK, this can mean you need more than the average buyer to get started. Shared ownership makes home ownership affordable in areas where house prices are high - for example, with StrideUp, you could buy a share of a home worth up to 6.5x your income, while Wayhome could help you afford a home worth 10x your income.

2. Get on the ladder with as little as a 5% deposit

Although some shared ownership schemes can require a larger deposit, there are some which only require a 5% deposit on the share you're buying. This could make it significantly easier to get a place to call your own by reducing the amount you need to put down up front.

The minimum deposit required is also lower than for a standard purchase on a property of the same value, as it is based on the share being bought rather than the whole house. Borrowing costs are also lower because you're taking out a mortgage to buy only a small share of the property.

3. Potential stamp duty savings

If the share being purchased is less than 80% of the property's full value, buyers may not need to pay stamp duty on the total property price. Instead, stamp duty is calculated on just the share being bought. For many first-time buyers, who already benefit from first-time buyer stamp duty relief, this could mean paying little or no stamp duty at all on their initial purchase.

4. The option to buy without a mortgage if you have enough cash saved

As long as you have enough cash to purchase the minimum share up front, Shared Ownership could allow you to live mortgage-free. Each month, rent is paid on the portion of the property not yet owned, with the option to buy more equity in the home over time. Unlike private renting, every payment toward the owned share is building real equity, meaning that you're growing stake in the property rather than simply covering a landlord's costs. Plus, with some schemes, if you don't want to purchase more of the property, you don't have to.

5. Some schemes are Shariah-compliant

Some part-buy-part-rent scheme providers are classed as home purchase plans and are certified by bodies such as the Islamic Council of Europe as Shariah-law compliant. This makes them a suitable alternative to a traditional mortgage for Muslims looking to buy a home while being in keeping with their faith.

Please note, we do not advise on Shariah-law compliant mortgages at Tembo.

Cons of Shared Ownership

1. The property must pass the provider's requirements

Many shared ownership providers set criteria for the types of properties which could qualify for the scheme. For example, some providers only accept pre-owned properties (so no new builds), while others only accept properties within a certain price range.

2. The amount of rent you pay could change

With some schemes, the amount you pay in rent can change over time. For example, with Wayhome, your rent will go up once a year at the rate of inflation, which is set by the government. However, your rent can also go down when you buy more of your home, because the amount of rent you pay is based on the landlord's remaining share. So the more of the property you own, the less rent you'll pay each month.

3. You must meet the provider's criteria

Like most mortgages and buying schemes, shared ownership providers have different eligibility criteria which you'll need to meet to be accepted.

• Earning under (or over) a certain income threshold
• Being over a certain age
• Being a first-time buyer, or someone who cannot currently afford a home that meets their needs
• Not already owning a property at the time of application

It's always worth checking a specific provider's criteria before you get too attached to a particular scheme.

4. Shared Ownership properties are leasehold

One of the criticisms of shared ownership is that it carries the costs of full ownership without all of the benefits. This stems from the fact that all shared ownership homes, both houses and flats, are leasehold properties. This means you will pay 100% of the service charge and ground rent of the property, even if you only own a share of the home.

You're also liable for the maintenance costs. So if the roof of your apartment block needs repair, or the front door intercom is on the blink, you'll most likely have to contribute. A solicitor will be able to explain how the lease works and what to expect in terms of maintenance costs.

5. Not all lenders offer Shared Ownership mortgages

It's worth knowing that not every mortgage lender offers Shared Ownership products, so the choice of deals can be more limited compared to a standard purchase. This is where working with a mortgage broker can really help, a broker can search across the lenders that do offer Shared Ownership mortgages to find the best deal for each buyer's circumstances.

Is Shared Ownership worth it?

Yes, for many buyers, Shared Ownership is absolutely worth it, especially if saving a large deposit or getting a big enough mortgage feels out of reach right now. It offers lower upfront costs, smaller monthly mortgage repayments, and a clear pathway to full ownership over time. For families who want to stop renting and start building equity in a home of their own, it can be a genuine game-changer.

That said, it's not the right fit for everyone. It comes with combined costs such as mortgage repayments, rent and leasehold charges, as well as responsibilities like maintenance costs, leasehold rules and potential staircasing fees. You might be better suited to other low-deposit mortgage schemes, or exploring ways to increase you affordability to borrow more for a standard mortgage.

For example, on a £240,000 home, buying a 40% share would mean purchasing £96,000 of the property. With a 5% deposit, that would be £4,800 upfront, before fees. Monthly costs would depend on the mortgage rate and rent charged on the remaining share, but they could come to around £890 a month before any service charges, ground rent or maintenance costs are added.