Shared Ownership Mortgage
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Shared Ownership Mortgage
Joe Joyce explains how shared ownership works – and how it can be a helpful route to owning a home.
Podcast approved by The Openwork Partnership on 28/01/2026
What is shared ownership, and how does it work?
Shared ownership is a government-backed scheme that allows people to buy a home when they can’t afford to purchase one outright.
Instead of buying 100% of a property, you buy a share, usually between 25% to 50%, although that can differ. The remaining share is then owned by a housing association or local authority. You pay mortgage payments on the share you own and rent on the remainder.
It’s a really useful scheme for first-time buyers who are struggling with a deposit or being able to afford 100% ownership. There’s also a scheme for existing homeowners if you’ve got a limited deposit.
Who is eligible for shared ownership? Who can get a shared ownership mortgage?
Both first-time buyers and home movers are eligible for shared ownership schemes. It’s just about finding the right property. The housing association or local authority will have certain criteria that you’ll need to meet.
Some of this criteria is not limited to the housing association’s own checks – for example, your household income cannot exceed £80,000 combined. You must be 18 years old or more and provide proof of a mortgage Agreement in Principle.
Where using a mortgage broker can be a real benefit is that we guide you through the information and the specific things you need to process the application. That’s not just with the mortgage, but also the whole application process with the housing association or local authority.
Which lenders offer shared ownership mortgages? Do all lenders offer these?
Most lenders offer these products, but not all of them. Your mortgage adviser can see which lenders are offering them and which will be the right ones for you.
Which properties are available for shared ownership?
Shared ownership is most common on new-build properties. However, you can get ‘secondhand’ properties on the open market. For example, if someone buys a shared ownership new build property and they later want to move, they can sell it on a shared ownership basis.
You can find these properties either via the housing association websites directly or on the usual house search websites.
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How much deposit do I need for a shared ownership mortgage?
Your deposit is based on the value of the percentage you’re buying, which is normally 25% to 50% of the property value. The deposit you would need is a minimum 5% deposit of that share.
To give you an example, if a property has a full value of £200,000 and you’re buying a 25% share, your share is worth £50,000. You therefore need a minimum deposit of £2,500.
Will my shared ownership property be freehold or leasehold?
Shared ownership properties are sold on a leasehold basis, no matter what type of property. If you end up purchasing more of your home over time, which is known as staircasing, once you own 100% of the property, the freehold is transferred to you.
Because it’s initially leasehold, we need to factor in the charges that come with that.
Can I buy a bigger share of my home at a later date?
Absolutely, yes. That’s staircasing. You can often purchase more of the property in set percentages, often going up in 5% increments.
With some housing associations, you can buy a 1% or 2% share. It’s worth speaking to your housing association and then talking to us to get the specifics of what’s available to you.
Can I ever fully own a shared ownership home?
Yes, depending on the specific scheme and the housing association, staircasing up to 100% is possible most of the time.
What happens if the value of my house changes?
If your property value increases, the increase you’re entitled to is just based on the share you own. But conversely, if the property decreases, the reduction will only affect you by the percentage of the property that you own.
What if I have bad credit? Can I still get a shared ownership mortgage?
Yes, it’s still possible if you’ve got bad credit. The bad credit could restrict which lenders will accept you and, therefore, your potential options. Speak to us in detail. Let’s get an understanding of your specific circumstances, and then we can advise you accordingly.
A mortgage adviser with the right experience and access to the right lenders should be able to find you some solutions.
What else do we need to know about shared ownership mortgages at this point?
Nothing more at the moment. But as we always say, get in touch with an adviser and speak to us in detail – we’ll be able to help accordingly.
Key Takeaways:
- Shared Ownership is a government-backed scheme where you buy a share of a home (typically 25% to 50%) and pay a mortgage on that share and rent on the remainder to a housing association.
- The scheme is open to both first-time buyers and home movers, but applicants must meet certain criteria, including a combined household income that typically cannot exceed £80,000.
- The required deposit is based only on the value of the share you are buying, not the full property value, with a minimum of 5% of that share value usually required.
- Shared ownership properties are initially sold as leasehold. Buyers can increase their owned share over time through a process called ‘staircasing’, and the freehold is transferred upon reaching 100% ownership.
- It is still possible to obtain a shared ownership mortgage with bad credit, although this may limit the number of lenders who will accept the application, making the use of a mortgage adviser beneficial.
Approved by The Openwork Partnership on 28/01/2026.