Shared Ownership Mortgages: Pros and Cons
Shared ownership can be a practical way to get onto the property ladder if full ownership is out of reach. It allows you to buy a share of a property and pay rent on the rest. However, it is not a shortcut to full ownership, and it comes with trade-offs that are often misunderstood.
This guide explains how shared ownership works in the UK, who it suits, and the key pros and cons you need to understand before committing.
What Is Shared Ownership?
Shared ownership is a scheme where you:
Buy a percentage of a property (typically between 25% and 75%)
Take out a mortgage on the share you own
Pay rent to a housing association on the remaining share
You are both a homeowner and a tenant at the same time. Over time, you may be able to buy more shares through a process called staircasing.
Why People Choose Shared Ownership
For many buyers, shared ownership solves one core problem: affordability.
The main advantages
Lower deposit requirement than buying 100% of a property
Smaller mortgage because you only borrow on your share
Access to home ownership for those priced out of the open market
Option to staircase and increase your ownership later
For some buyers, it is the only realistic way to stop renting privately and start building equity.
The Downsides You Must Understand
Shared ownership is not a cheap workaround, and it is not risk-free.
Slower equity growth
You only benefit from house price growth based on the share you own.
If a property increases in value by £20,000 and you own 50%, your gain is £10,000 — not the full amount.
Ongoing rent + mortgage costs
You pay:
A mortgage on your share
Rent on the unsold share
Service charges where applicable
This combined cost can make affordability assessments more complex.
Staircasing is not guaranteed
Buying more shares later depends on:
Your future income
Property value at the time
Mortgage affordability then
There is no promise that staircasing will always be affordable or achievable.
Restrictions apply
Shared ownership properties often come with rules, including:
Limits on subletting
Approval needed for alterations
Housing association involvement when selling
How the Shared Ownership Process Works
1. Check eligibility
Shared ownership schemes usually have income caps and criteria set by the housing association.
2. Choose your share
You decide what percentage to buy based on affordability. This choice affects your mortgage size, rent, and future flexibility.
3. Apply for a mortgage
You apply for a mortgage on the share you are buying. Not all lenders are comfortable with all share sizes or property types.
4. Legal process
The conveyancing is more involved than a standard purchase because the housing association is a third party to the transaction.
5. Move in
Once complete, you pay your mortgage, rent, and any service charges monthly.
6. Consider staircasing later
If your circumstances improve, you may be able to buy additional shares over time.
Common Challenges Buyers Face
Confusion around how rent and mortgage payments work together
Affordability issues due to combined monthly costs
Misunderstanding the true long-term cost of staircasing
Surprise restrictions on use or resale of the property
These issues usually come from a lack of clear explanation at the start.
Is Shared Ownership Right for You?
Shared ownership works best if:
You cannot buy outright right now
You plan to stay in the property for a reasonable period
You understand that gains and flexibility are limited compared to full ownership
It is less suitable if you expect rapid income growth or want full control over selling and alterations from day one.
How We Help
We:
Break down the true monthly cost so there are no surprises
Find lenders comfortable with your share size and profile
Explain the long-term implications before you commit
We make no claims that shared ownership is cheaper long-term and no promises that staircasing will always be affordable.
The Bottom Line
Shared ownership can be a smart stepping stone, but only if you understand the compromises. With clear advice and realistic expectations, it can help you move from renting into ownership without walking in blind.
