How does Shared Ownership work? A guide for first-time buyers

April 13, 2026 | Dan Todd

For many first-time buyers, getting onto the property ladder can feel almost impossible.

With rising living costs, soaring house prices, and the need for a sizeable 10–20% deposit, the dream of homeownership can feel out of reach.

Add high rental costs into the mix – making it harder than ever to save – and the challenge becomes even more daunting.

But there is another option. Shared Ownership is a government-backed scheme designed to help people step into homeownership sooner, even if buying outright isn’t currently affordable.

If you’re wondering “How does Shared Ownership work?”, this guide walks you through everything you need to know.

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What is Shared Ownership?

Shared Ownership has been helping buyers for over 40 years. Instead of buying 100% of a property, like you would on the open market, you purchase a share of the home – typically between 10% and 75% – from a registered provider such as a housing association.

With Shared Ownership, you:

One of the biggest advantages of Shared Ownership is that it requires a smaller deposit. Since your deposit is based on the share you’re buying, not the full property value, you often need far less upfront.

Example:
The average house price December 2025 according to the Halifax House Price Index is £297,755, which means a 10% deposit to buy outright would be nearly £30,000.

But a 5% deposit on a 25% share of a similarly priced house could be just £3,722, making it much more affordable to potential buyers.

Over time, you can purchase additional shares through a process called staircasing, eventually reaching 100% ownership if you choose. The more you own, the less rent you pay.

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How does Shared Ownership work: step-by-step

1. Choose a property

Start by browsing Shared Ownership homes on housing association websites or dedicated portals like Share to Buy.

2. Check Your Eligibility

Most buyers complete a registration form and a financial assessment with a specialist mortgage broker. They’ll look at your income, savings, and outgoings to determine what share you can afford.

You’ll need documents such as ID, payslips, and bank statements.

3. Get a Mortgage Agreement in Principle (AIP)

Once your affordability assessment is complete, your broker will help secure an AIP.

4. Reserve your home

If you decide to proceed, you’ll pay a reservation fee (e.g., £250 with Onward Living) to hold the property.

5. Instruct a Solicitor

A solicitor – preferably one with Shared Ownership experience – will handle the legal process and conveyancing.

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Who is eligible for Shared Ownership?

Around 260,000 households already live in a Shared Ownership home, highlighting its growing popularity.

However, there are some eligibility requirements you need to meet in order to qualify, including:

• Your household income is £80,000 or less (or £90,000 in London)
• You are a first-time buyer, former homeowner unable to buy again, or an existing homeowner who can’t afford a suitable property on the open market
• You are aged 18+
• You have no bad debts or rent arrears
• You can afford all the associated costs

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What costs should you expect?

As with any house purchase, buying through Shared Ownership involves several costs, including:

Upfront costs

• Deposit – Typically, your deposit starts from 5% of the share you are purchasing, not the full property value

• Mortgage broker fees – While the initial affordability assessment is free of charge, most mortgage brokers will charge a fee for their services. This can vary from a fixed amount to a percentage of the purchase price.

• Reservation fee – The reservation fee is used to formally secure your plot. Payment will be taken on the day of reservation and is non-refundable but will be deducted from the sale price at completion.
• Legal fees – You’ll need to hire a solicitor or licensed conveyancer to handle the required legal work associated with buying a home.

Monthly costs

• Mortgage payments – The amount you pay each month will depend on the value of the share you purchase, the deposit you initially put down, the remaining length of your mortgage term, and the interest rate.
• Rent – Shared Ownership homes are sold on a leasehold basis. When your lease is first issued, the rent that you pay is generally calculated at 2.75% of the share still owned by the housing association/landlord (per year).
• Service charge – A monthly charge for communal maintenance and repairs
• Ground rent – where applicable
• Buildings insurance – Buildings insurance will be the responsibility of the freeholder (the housing association) and will be incorporated into your service charge
• Monthly bills – As the homeowner, you will be responsible for monthly bills such as council tax, gas and electricity bills, water bills, TV licence and broadband

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Selling a Shared Ownership home

How does Shared Ownership work when it comes to selling your home? Well, you can sell your Shared Ownership home at any time, no matter what percentage of the home you own.

If you own a percentage of the home, you need to inform your landlord (the housing association) of your intention to sell to give them an opportunity to find a buyer for your share.

If you have staircased and own a 100% of your home, then you can usually sell it on the open market like you would with any other type of home.

Download our staircasing guide

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Shared Ownership vs. other options

Shared Ownership is just another way to buy your home. But how does it compare with other buying schemes, and even to renting privately? Here’s a quick look:

Compared to buying on the open market:

• Ownership: With Shared Ownership, you only own a portion of the home and pay rent on the rest. Buying on the open market means you own the entire home from day one.
• Upfront costs: With Shared Ownership you have a significantly lower deposit (typically 5-10% of the share you are buying rather than the total value). Buying on the open market requires a larger deposit, which can be a hurdle for many first-time buyers.
• Monthly costs: With Shared Ownership you have a smaller monthly mortgage payment (because you only pay a mortgage for the share buy plus a reduced rent on the remaining share).

Compared to private renting:

• Security: Shared ownership offers long-term security, usually on a 990-year lease, whereas renting privately offers little security.
• Costs: Your total monthly costs of a mortgage on your share, rent on the rest and service charges (that will vary depending on the home you buy) is usually comparable to an equivalent home if you were privately renting, if not less.
• Value Growth: With Shared Ownership, you benefit from any increase in value on the share you own, whereas you won’t see a return on anything you spend while renting privately.

Compared to Rent to Buy:

• Structure: Shared Ownership requires an immediate deposit to purchase a share, while Rent to Buy allows you to rent at a reduced rate for a few years before buying, usually without a large initial deposit.
• Timing: Rent to Buy is better for those who need time to save a deposit; Shared Ownership may be more suited to those who have a small deposit ready.

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Is Shared Ownership right for you?

How does Shared Ownership work for you? Shared Ownership is often a good fit if:

• You’re struggling to afford the open market
• Your household income is below £80,000
• You’ve saved a small deposit
• You want long‑term security
• You’re planning for stability rather than short‑term moves

Shared Ownership might be the right scheme for those looking to get on the housing ladder. But remember that it’s a small part of the overall housing market and won’t be the right option for everyone.

Before you make any decision about Shared Ownership be sure to review all costs, understand the lease terms, and consider your long‑term plans before committing.

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Conclusion

We hope this blog has answered your question of ‘how does Shared Ownership work?’. Shared Ownership offers a more affordable pathway into homeownership for people who are struggling to buy on the open market.

By allowing buyers to purchase a share of a property with a smaller deposit and pay subsidised rent on the remainder, Shared Ownership helps reduce upfront costs and monthly outgoings. It is particularly suited to first-time buyers and households with incomes under £80,000 who have a modest deposit saved.

However, Shared Ownership still comes with ongoing responsibilities such as rent, mortgage payments, service charges and legal fees. While it provides long‑term security and the option to increase your ownership over time through staircasing, it won’t suit everyone.

Before deciding, it’s important to review your finances, understand all associated costs, research providers, and consider your long‑term plans. With the right preparation, Shared Ownership can be an effective stepping stone toward full homeownership.