What is shared ownership? Part buy, part rent explained

What is shared ownership?

Shared ownership means you buy a share of a home, usually between 25% and 75% of the full price, with a mortgage on that share, and pay rent to the landlord on the part you do not own (GOV.UK). The landlord is normally a housing association or a local council. On some homes you can start with a share as small as 10%.

That is why people call it part buy, part rent. It is a government-backed way to buy part of a home when you cannot afford all of it. You get a foot on the ladder with a much smaller deposit than a normal purchase needs, because the deposit is worked out on your share rather than on the whole home. In return you pay rent every month on the landlord’s share, on top of your mortgage and service charges.

About 202,000 households in England live in shared ownership homes, which is less than 1% of all households (House of Commons Library). It has been around for decades, but the rules were rewritten in 2021 for new homes, so a lot of older advice online is out of date.

How does part buy, part rent work in pounds?

The simplest way to understand a shared ownership property is to price one. Take a home with a full market value of £300,000 and a 40% share, using the figures GOV.UK gives for deposits and rent.

The 5.55% mortgage rate is our working figure for September 2026: a 5% deposit on the share means a 95% mortgage on it, and 5.55% was the best 95% fixed rate in the HomeOwners Alliance rate table on 26 September 2026. Rates differ between lenders, so treat the £703 as an illustration. GOV.UK says the rent on new-build shared ownership homes is capped at 3% a year of the landlord’s share and that most landlords charge 2.75% (GOV.UK).

Notice where the money goes. The £703 mortgage payment slowly buys you more of your own home. The £413 rent and the £150 service charge buy you nothing back. Change any of these numbers in the shared ownership calculator to see your own version.

Who provides shared ownership homes?

Housing associations, local councils and some other organisations sell shared ownership homes (GOV.UK). GOV.UK says you can find them through housing associations, councils, homebuilders and the national property websites, and through the Homes for Londoners site in London (GOV.UK).

You can buy three kinds of home this way: a new-build home, an existing home sold on by a current shared owner through a resale scheme, or a home that meets your needs if you have a long-term disability (GOV.UK). Every one of them is leasehold, houses as well as flats, which means you own the home for the length of the lease rather than owning the land outright. New homes built under the 2021 rules come with a lease of at least 990 years; see the new build page.

Who can buy a shared ownership property?

You can buy through shared ownership if your household income is £80,000 a year or less, or £90,000 or less in London (GOV.UK). You must also be unable to afford all of the deposit and mortgage payments for a home that meets your needs. And one of these must be true:

• you are a first-time buyer
• you used to own a home but cannot afford one now
• you are forming a new household, for example after a relationship breakdown
• you are an existing shared owner who wants to move
• you own a home but cannot afford to move to one that meets your needs

Serving members of the armed forces get priority. People aged 55 and over can use older persons shared ownership, where the maximum share is 75% and no rent is charged once you own that much (GOV.UK). The eligibility page goes through each rule with examples.

What do you pay every month?

Four things: your mortgage, rent on the landlord’s share, a service charge, and buildings insurance (GOV.UK). Some homes add an estate charge for shared roads and green spaces, a management fee for the landlord’s administration, and payments into a repairs reserve fund for big jobs such as a new roof.

The rent is reviewed at the times set out in your lease, usually once a year, and GOV.UK is blunt about the direction: it may go up and it will not go down (GOV.UK). Leases signed from 12 October 2023 raise the rent by either the Retail Prices Index plus up to 0.5% or the Consumer Prices Index plus 1%; older leases use the Retail Prices Index plus 0.5%.

Repairs are your job too. GOV.UK says you pay for repairs and maintenance no matter what share you own (GOV.UK). The exception is a new-build home bought under the 2021 rules, where for 10 years the landlord covers essential external and structural repairs, plus up to £500 a year on key fixtures.

What happens later: staircasing and selling

Buying more of the home is called staircasing. You can usually buy shares of 10% or more at any time, some newer leases allow 5%, and if you bought on or after 1 April 2021 you may be able to buy 1% a year for the first 15 years (GOV.UK). Each extra share is priced at the home’s value at the time, so if prices rise the rest of your home gets dearer. Your rent falls in step with the landlord’s shrinking share.

Selling is different from a normal sale. If you own less than 100%, you tell the landlord, who has 4, 8 or 12 weeks depending on your lease to find a buyer at a price set by a surveyor registered with the Royal Institution of Chartered Surveyors (GOV.UK). You pay for that valuation, and the landlord may charge a fee. The selling page explains what you get back.

How does shared ownership compare with Your First Home?

Your First Home, the government’s new equity loan scheme announced on 26 September 2026, takes a different route to the same problem. You buy 100% of a new-build home in England with a 2.5% deposit, the government lends you 20% of the price as an equity loan, and a normal mortgage covers the rest (GOV.UK). Its full rules are due at the Budget on 28 October 2026.

On the £300,000 home above, Your First Home would need a £7,500 deposit and a £232,500 mortgage costing about £1,359 a month at 5% (the best rate for a mortgage of that size against the price), with no rent. The 40% shared ownership share needs £6,000 down and about £1,266 a month including the service charge. Under Your First Home you would own the whole home rather than 40% of it, but you would owe the government 20% of its value when you sell. Shared ownership is open to people who are not first-time buyers, works on existing homes as well as new ones, and has an income cap that already exists. The Your First Home vs Shared Ownership page sets the two side by side.

Is shared ownership right for you?

It suits people who can afford a monthly payment but not a full deposit, who want to stay put for several years, and who have checked the service charge and the lease before falling for the kitchen. It suits people less well if they plan to move within two or three years, if the service charge is high for what it covers, or if they could save a bigger deposit within a year and buy outright. The is it worth it page weighs the pros and cons honestly, including what a committee of MPs found in 2024.

What to do next

• Check the eligibility rules against your household income and situation.
• Price a real home in the shared ownership calculator, including the service charge from the listing.
• Read how shared ownership mortgages differ from normal ones before you speak to a lender or broker.
• Compare the monthly cost with Your First Home if you are a first-time buyer looking at a new build.