Shared Ownership: Is It Right for You in 2025?

What Is Shared Ownership?

Shared ownership is a government-backed homeownership scheme designed to make buying a property more accessible for people who cannot afford to purchase on the open market. Under shared ownership, you purchase a share of a property — initially between 10% and 75% — and pay a subsidised rent to a housing association on the share you do not own.

Over time, you can increase your ownership share through a process known as staircasing — buying additional shares until you own 100% outright. From 2021, new shared ownership leases in England allow staircasing in 1% increments, making the process significantly more accessible.

How Shared Ownership Works

When you purchase a shared ownership property:

1. You agree the initial share percentage with the housing association (minimum 10%, maximum 75% for new properties)
2. You obtain a mortgage for the share you are purchasing (typically needing a 5%–10% deposit on the share, not the full property value)
3. You pay a subsidised rent to the housing association on the remaining share they retain
4. You pay a service charge for the maintenance and management of the building (for leasehold flats)
5. Over time, you can staircase — buying additional shares at market value

Worked Example

Property value: £300,000

• You purchase a 50% share = £150,000
• Deposit (10% of your share) = £15,000
• Mortgage required = £135,000
• Monthly mortgage payment (at 4.5% over 25 years) ≈ £748
• Monthly rent on remaining 50% (at typical 2.75% of unsold share) ≈ £344
• Total monthly housing cost ≈ £1,092 + service charge

Pros and Cons of Shared Ownership

Advantages

• Lower deposit required — deposit is calculated on your share, not the full property value
• Lower monthly mortgage payments than purchasing outright
• You own a legal interest in the property and benefit from price appreciation on your share
• You can increase your share over time as your finances allow
• Available on both new build and resale properties

Disadvantages

• Total monthly outgoings (mortgage + rent + service charge) may be higher than renting in some areas
• You are responsible for 100% of the maintenance costs on the property, even when you own a small share
• The rent on the unsold share can increase, typically annually, in line with RPI or CPI
• You have less flexibility — you cannot sublet the property without the housing association's consent
• The housing association may have a nomination period when you want to sell, restricting your ability to find a buyer on the open market
• Shared ownership is a leasehold tenure — you should check the lease term carefully

Stamp Duty on Shared Ownership

Shared ownership buyers have a choice when it comes to SDLT:

Option 1: Market Value Election

Pay SDLT on the full market value of the property (not just your share) at the outset. The benefit: no further SDLT is payable when you staircase up to 80% of the property. This is generally the better option if you plan to staircase significantly over time.

Option 2: Stage by Stage

Pay SDLT only on the value of the initial share you purchase. Subsequent SDLT becomes payable on each staircasing transaction until you own 80% — at which point any further staircase is SDLT-free.

For first-time buyers, the first-time buyer SDLT relief can apply to a shared ownership purchase on shares up to the relevant threshold.

Your solicitor will advise on the most tax-efficient election for your specific circumstances.

Staircasing: Buying Additional Shares

Staircasing is the process of purchasing additional shares in your shared ownership property. Each staircasing transaction requires:

• A property valuation (to establish the current market value and therefore the price of additional shares)
• Legal work from a solicitor to handle the transaction and update the lease
• Potentially a new or revised mortgage offer if you are increasing your borrowing
• SDLT consideration (see above)

Since 2021, new shared ownership leases in England allow staircasing in minimum 1% increments (rather than the previous minimum of 10%), making it more accessible for those who want to gradually increase their share.

Selling a Shared Ownership Property

You can sell your shared ownership property at any time, subject to the terms of your lease. Most leases include a nomination period — typically 8 weeks — during which the housing association has the right to find another eligible buyer for the property. If they cannot find a buyer within this period, you are usually free to sell on the open market.