How Do Shared Ownership Mortgages Work?
You buy a share (25-75%) with a mortgage and pay rent on the rest. Deposit is 5-10% of your share only, making it much more affordable than buying outright.
Shared ownership is a government-backed scheme helping people get on the property ladder. You purchase a share of a new-build or resale shared ownership property, typically between 25% and 75%, and pay subsidised rent (usually 2.75% of the housing association's share) on the remainder. Your mortgage covers only your share, so borrowing requirements are lower. Over time, you can 'staircase' - buying additional shares in 10% increments until you own the property outright. The scheme is available through housing associations and is aimed at first-time buyers and those who previously owned but can't now afford to buy.
Your home may be repossessed if you do not keep up repayments on your mortgage. With shared ownership, you also pay rent - missing rent payments has consequences.
Key Points
- 1Buy 25-75% share, pay rent on the rest
- 2Deposit is 5-10% of your share only
- 3Rent typically 2.75% of housing association's share
- 4Can staircase to full ownership over time
- 5Household income must be under £80,000 (£90,000 London)
- 6Available on new builds and resales
Eligibility Criteria
- First-time buyer (or owned before but can't afford now)
- Household income under £80,000 (£90,000 in London)
- Cannot afford to buy suitable property on open market
- Meet lender affordability for mortgage plus rent plus charges
- Must be able to get a mortgage (no bankruptcy, etc.)
Typical Timeframe
Shared ownership applications take 8-12 weeks typically, longer than standard purchases due to housing association processes. You'll need to register with local housing associations and may need to attend eligibility interviews. Priority is often given to local residents and key workers.
Next Steps
- 1Check your eligibility on the gov.uk website
- 2Register with housing associations in your area
- 3Get a mortgage agreement in principle
- 4View available shared ownership properties
- 5Apply through the housing association
Why This Matters for Your Mortgage
Understanding these details helps you make informed decisions during the mortgage process. Every element of your application—from deposits to documentation—affects your approval chances and the rates you can access.
Lenders assess applications holistically, weighing multiple factors together. Knowing what they look for allows you to present the strongest possible application. This is particularly important for non-standard situations where lender criteria varies significantly.
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Related Questions
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Content reviewed: January 2026
CeMAP awarded by The London Institute of Banking & Finance. Cert CII (MP) awarded by the Chartered Insurance Institute.