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Shared Ownership: What do you need to know?


There are many government schemes designed to make buying a home more accessible for people who would otherwise struggle to generate a deposit and to suit your individual situation. Shared Ownership is another one of these schemes which has grown in popularity in recent years, but what do you need to know before making a decision?

What is the ‘Shared Ownership’ scheme?

The Shared Ownership scheme is an alternative route onto the property ladder by giving borrowers an opportunity to purchase a share in either a new build or resale home. Otherwise referred to as part by/part rent, this scheme involves the borrowers securing a mortgage for part of a house and renting the remainder. This means that both the deposit and the monthly mortgage payments are considerably lower and allows first-time buyers to make their first steps towards owning a home. Once the initial deposit is paid, the borrower becomes an owner-occupier meaning they have the long-term stability of owning a home at a more affordable price. Since 2016, the number of completions for shared ownerships has increased by over 416% – but why is this scheme showing a rapid rise in popularity?

Naturally, there are a few criteria to be met before an application for a shared ownership can be accepted. Firstly you must be at least 18 years old (as with all mortgages) with a maximum household income of £80,000 per annum – or £90,000, for those living in London. The scheme is also exclusive to those who are unable to purchase a suitable home on the open market, meaning it is only available to those who need to use such a scheme.


The scheme only applies to borrowers who do not own a home at the time of application and don’t have any mortgage or rent arrears. Usual expectations must also be met such as the ability to display a good credit score as well as being able to pay a suitable deposit for the share of the home being purchased. The Shared Ownership scheme also prioritises accepting members of the military.

How does it work?

On the face of it, the idea of paying rent and a mortgage simultaneously sounds astronomically expensive – but fear not. Both amounts are based on proportion. This means that the monthly payments for a shared ownership can be the same as an average mortgage. Rent on shared ownership is typically set at approximately 3% of the unsold equity per year. Once a deposit (usually 5% – 10%) is paid, the monthly mortgage payments will be calculated , and the combined payments would usually equate to a manageable amount.

Crunching the numbers

The vast majority of shared ownership purchasers are between the ages of 20 and 40, with the most common age being people in their late 20’s. This shows that it’s common for first-time buyers to take advantage of this scheme due to it’s accessibility. The vast majority of shared ownership purchasers are between the ages of 20 and 40, with the most common age being people in their late 20’s. This shows that it’s common for first-time buyers to take advantage of this scheme due to its accessibility.

As well as this, half of shared ownerships are taken out by single adults, likely due to the fact that it’s one of the easiest ways to obtain a mortgage on a single annual income. The average value of shared ownership properties based on the most recent data from 2019 was £265,000 as the scheme is most commonly used on lower value properties by first-time buyers or buyers on a strict budget.

Another interesting statistic surrounding shared ownership is that 94% of people who utilise the scheme are in employment. It has become increasingly difficult for younger people to save for a full deposit in recent years, so the shared ownership scheme helps employed younger people to secure the funds for a full deposit.

If you are looking for a cheaper or more manageable alternative to a traditional mortgage, the Shared Ownership Scheme is certainly one to consider.

If you enjoyed reading this this article, read more on on our blog.

Tanjima Haque

Tanjima is one of our Graduate Systems Support Coordinators at Town & Country Mortgage Services.

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