A shared ownership mortgage lets you buy a portion of a property — usually between 25% and 75% — and pay rent on the remaining share, which is owned by a housing association or developer. You can later “staircase” (buy more shares) until you own 100% of the home.
This scheme is available to first-time buyers, people who used to own a home but can’t afford one now, and those with a household income below £80,000 (£90,000 in London).
✅ Pros of Shared Ownership Mortgages
- Lower Deposit Requirements
Since you’re only buying a share of the property, your deposit is based on that share’s value — making it easier to step onto the property ladder. - Affordable Monthly Payments
The combination of a smaller mortgage and subsidised rent often results in lower monthly payments compared to buying outright or renting privately. - Gradual Ownership Increase
You can buy more shares (known as staircasing) over time as your financial situation improves, eventually owning your home outright. - Access to Better Properties
Shared ownership can help you buy in desirable areas that might otherwise be unaffordable. - Security of Ownership
Unlike renting, you gain stability since you own a share of the property and can stay long-term.
❌ Cons of Shared Ownership Mortgages
- Rent Still Applies
You’ll pay rent on the remaining share, meaning you have both rent and mortgage payments each month. - Limited Property Choices
Shared ownership homes are usually part of specific developments, so your options may be limited by location or property type. - Maintenance and Service Charges
You are responsible for 100% of maintenance costs, even if you only own part of the home. Many properties also include service charges for communal areas. - Staircasing Costs
Each time you increase your ownership share, you’ll incur additional valuation, legal, and mortgage fees. - Harder to Sell
Selling a shared ownership property can take longer since you must offer it first to the housing association before it goes on the open market.
💡 Example of How It Works
Suppose a property costs £300,000 and you buy a 50% share (£150,000).
If your lender requires a 10% deposit, you only need to put down £15,000.
You’ll then pay a mortgage on £135,000 and rent on the remaining £150,000 share.
🏡 Final Thoughts
A shared ownership mortgage can be an excellent path to homeownership for those struggling with deposits or affordability. However, it’s essential to weigh the pros and cons carefully and understand your responsibilities as both an owner and tenant.
If you’re considering shared ownership, speak with a mortgage advisor to explore the best options for your financial situation and long-term goals.