Getting on the property ladder has become increasingly challenging for first-time buyers, with rising house prices, high deposit requirements and affordability checks making homeownership feel out of reach. One option that has grown in popularity over the last two decades is shared ownership. But what does it actually involve and could it be the right step for you?
This guide explains how shared ownership works, the potential benefits and the common pitfalls to look out for before deciding if it’s a good fit for your circumstances.
What Is Shared Ownership?
Shared ownership is a UK government-backed scheme designed to help people who can’t afford to buy a home outright. Instead of purchasing the full property, you buy a share (usually between 25% and 75%) and pay rent on the remaining portion to a housing association.
Later, you have the option to buy more shares — a process known as “staircasing” — until you eventually own the property outright (if you choose to).
To finance your share, you’ll typically need a shared ownership mortgage, which is specifically designed for this type of scheme.
Who Is Eligible?
You may qualify for shared ownership if:
- You are a first-time buyer or used to own a home but can’t afford to buy one now
- Your annual earnings are under £80,000 a year outside London (or £90,000 in London)
- You are over 18 and can demonstrate that you can afford the costs involved.
Each housing association will also have its own checks and may prioritise applicants such as key workers or those already renting in the local area.
The Pros of Shared Ownership
- Lower deposit requirements – Because you’re only buying a share, the deposit is a percentage of that share rather than the full property value.
- More affordable entry point – Shared ownership can open doors to homes that would otherwise be out of reach.
- Staircasing flexibility – You can increase your ownership share over time, as your income and savings allow.
- Security compared to renting – Even though you’re paying rent on part of the property, you’re also building equity in your owned share.
- Potential to sell – You can sell your share when you move, and you’ll benefit from any increase in the property’s value.
The Cons and Pitfalls
While shared ownership can be a stepping stone, it isn’t without drawbacks:
- Rent still applies – You’ll pay rent on the share you don’t own, which can rise annually.
- Service charges and fees – Many shared ownership properties are leasehold, meaning service charges, ground rent and maintenance fees can add up.
- Staircasing costs – Buying more shares involves valuation fees, legal costs and sometimes restrictions on how many times you can staircase.
- Limited choice – Shared ownership homes are usually new-builds or part of specific developments, which may not suit everyone’s preferences.
- Selling can be more complex – Housing associations often have the first right to find a buyer, which can slow down the selling process.
Is Shared Ownership Right for You?
Shared ownership can be a realistic way to get onto the property ladder if you’re struggling with deposits or affordability, especially in high-demand areas. However, it’s not the cheapest or simplest route for everyone.
Consider your long-term plans: if you expect your income to grow and want the flexibility to buy more over time, it could be ideal. But if you’d rather avoid ongoing rent and leasehold complexities, saving for a smaller property outright might be a better option.
Final Thoughts
Shared ownership can be a valuable stepping stone for first-time buyers, but it comes with obligations and costs that aren’t always obvious at first glance.
Argyll Drummond specialises in helping buyers understand these complexities and weigh up whether shared ownership really fits their long-term plans.
Speaking with one of our advisers means you’ll get clear, personalised guidance on the options available — so you can make confident decisions about your next step onto the property ladder.
Get in touch with our team today to explore your options and start planning your route to homeownership.