How it works · Eligibility · Staircasing · Stamp duty · Pros and cons · Updated May 2026
How shared ownership works
Shared ownership is a government scheme that lets you buy a portion of a property (initially 10–75%) and pay subsidised rent on the remaining share to a housing association. You take out a mortgage on your share only — making the deposit and monthly repayments much more affordable than buying on the open market.
The scheme applies to newly built homes and some existing shared ownership properties resold through housing associations. All shared ownership properties are leasehold — you do not own the land.
New model (2021 onwards): Properties launched under the new model allow you to buy a minimum 10% share and staircase in 1% increments. Older shared ownership properties (pre-2021) often have a 25% minimum and staircase in larger tranches (typically 5–10%). The rules that apply to you depend on when your property was first advertised.
Eligibility criteria
To qualify for shared ownership, you must meet all of the following:
Your household income is £80,000 or less per year (£90,000 or less in London)
You are a first-time buyer, or you used to own a home but can no longer afford to buy, or you are an existing shared ownership homeowner looking to move
You cannot afford to buy on the open market in the area where you want to live
The property will be your only home — you cannot own other property
You meet the housing association's own affordability checks
Military personnel: Armed forces members are given priority access to shared ownership regardless of whether they are first-time buyers. Contact your local authority or housing association for priority applications.
Monthly costs: mortgage + rent
Your monthly outgoings in shared ownership are split between:
Mortgage on your purchased share (arranged by you, from a lender that offers shared ownership mortgages)
Rent on the remaining share (paid to the housing association — typically capped at 3% of the unsold share's value per year)
Service charge covering maintenance of communal areas, buildings insurance etc. (varies widely — check carefully before buying)
Worked example — 40% share of £300,000 property
Item
Calculation
Monthly cost
Mortgage on 40% share (£120,000)
25yr repayment at 4.5%
~£660
Rent on 60% share (£180,000)
£180,000 × 2.75% ÷ 12
£413
Service charge (estimate)
—
£150–£300
Total monthly cost
~£1,220–£1,370
By comparison, a mortgage on the full £300,000 at 4.5% over 25 years would cost ~£1,648/month — requiring a much larger deposit and income. Shared ownership reduces the mortgage to the affordable share while the rent replaces part of the open-market mortgage.
First-time buyers using shared ownership have two options for paying SDLT:
Option
Pay stamp duty on
Effect when staircasing
Best if
Option 1 (default, most choose this)
Your purchased share only (e.g. 40% of £300k = £120k)
SDLT payable again when you staircase above 80%
You won't staircase quickly; first-time buyer relief applies
Option 2
Full market value (e.g. £300k)
No SDLT on future staircasing
You plan to staircase quickly; larger purchase
Under Option 1, first-time buyers pay 0% SDLT on shares up to £300,000 (standard first-time buyer threshold). On a 40% share of a £300,000 property = £120,000 — no SDLT at all. SDLT becomes payable when/if you staircase above 80% of the full market value.
Staircasing to full ownership
Staircasing is the process of buying additional shares of your property over time. Each time you staircase, the new share price is based on the current market valuation — so if your property has risen in value, you pay more for subsequent shares. If it has fallen, you pay less.
New model (2021+): Staircase in 1% increments each year — giving flexibility for smaller lump sum purchases
Older model: Typically minimum 5–10% per staircasing transaction; legal and valuation costs each time
Once you own 100%, you own the property outright, the ground rent and service charge structure changes, and you can sell on the open market freely
Each staircasing transaction costs money: You'll need a RICS valuation (£200–£500), solicitor fees (£750–£1,500) and potentially additional SDLT. Factor these transaction costs into your decision about when and how much to staircase.
Selling a shared ownership property
If you own less than 100%, the housing association has a right of first refusal: they can try to find a buyer for your share (typically 21 days under the new model, or up to 8 weeks under older agreements). If they don't find a buyer in time, you can sell on the open market — but the buyer must meet shared ownership eligibility criteria unless you've reached 100%.
At 100% ownership you sell like any other property with no restrictions on buyers.
Pros and cons of shared ownership
Pros
Much lower deposit required (on share, not full price)
Get onto the property ladder when full ownership isn't affordable
New model allows 10% minimum share and 1% staircasing increments
Rent on unsold share is subsidised (typically 2–3%)
SDLT savings for first-time buyers on smaller shares
Cons
Pay both mortgage AND rent — combined can exceed open-market mortgage
Service charges can be high and rise sharply
All shared ownership properties are leasehold — check remaining lease length
Resale restrictions: housing association has first refusal
Mortgage market for shared ownership is narrower — fewer lenders and potentially higher rates
Staircasing costs money each time
Frequently asked questions
You must be a first-time buyer (or unable to afford to buy on the open market), with household income not exceeding £80,000 (£90,000 in London). The property must be your only home. You'll also need to pass the housing association's own affordability checks. Military personnel are given priority.
Under the new model (2021+), you can buy a minimum of 10% and a maximum of 75% initially. You can then staircase in 1% increments. Under older shared ownership agreements, the minimum is typically 25% and staircasing must be done in larger chunks (often 5–10% minimum per transaction).
You have two options: pay SDLT on your purchased share only (usually cheapest — first-time buyers pay 0% on shares under £300,000), or elect to pay SDLT on the full market value upfront (no SDLT when staircasing). The first option suits most buyers unless you plan to staircase rapidly.
Yes. The housing association has the right of first refusal (21 days under the new model) to find a buyer for your share. After this window passes, you can market it on the open market — though buyers must meet shared ownership eligibility criteria until you own 100%. At full ownership you sell without restriction.