Shared Ownership Mortgages Explained

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What is shared ownership and how it works

You can buy a home through the shared ownership scheme if you cannot afford all of the deposit and mortgage payments for a home that meets your needs.

You essentially are buying a share of the property and paying rent to a landlord on the rest.

The scheme does differ depending on your location, There are different rules on:

• shared ownership in Northern Ireland

• shared ownership in Scotland

• shared ownership in Wales


How does it work in England?

When you buy a home through shared ownership, you:

• buy a share between 10% and 75% of the home’s full market value

• pay rent to the landlord for the share they own

• usually pay monthly ground rent and service charges, for example towards the maintenance of communal areas


Buying your share

The share you can buy is usually between 25% and 75%. You can buy a 10% share of some homes.

You can take out a mortgage to buy your share or pay for it with savings. You’ll also need to pay a deposit, usually between 5% and 10% of the share you’re buying.

You can buy more shares in your home in the future. This is known as ‘staircasing’. If you buy more shares, you’ll pay less rent. The amount of rent you pay will be based on the landlord’s share.


Homes you can buy through a shared ownership

Not all homes can be purchased through this scheme, so it is best to make sure this is a possibility when choosing your home, if you are unsure, please talk to your mortgage adviser as they will be able to assist you with this.

You can buy:

• a new-build home

• an existing home through a shared ownership resale scheme

• a home that meets your specific needs, if you have a long-term disability – for example, a ground floor flat

Shared ownership homes are offered by housing associations, local councils, and other organisations. They are called ‘providers’ or landlords.

All shared ownership homes (houses and flats) are leasehold properties.

Shared Ownership Overview:

• Deposit required: Between 25% and 75%

• Ownership: A leasehold interest worth between 10%-75% of the home’s value (local conditions may apply)

• Headline benefits: Allows for home purchases if unable to provide a full deposit

• Headline requirements:  Household income is less than £80,000 per year (90,000 in London)


Here are some additional resources that you may find helpful:

A Guide to Shared Ownership Mortgages - PFG Mortgages

Download our Shared Ownership
Mortgage Guide

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