What is Shared Ownership?
To put it simply, Shared Ownership is a government-backed scheme that allows home buyers to buy a share of a home – typically between 25% and 75% – and pay a subsidised rent on the remaining portion.
This model is designed to make homeownership more accessible, especially for first-time buyers living in expensive areas who struggle to save for a large deposit or secure a full mortgage on the open market.
You will also become a leaseholder and an owner-occupier, and be able to decorate your home to your liking.
How does Shared Ownership work?
Shared Ownership lets you buy a share of a home and pay rent on the part you don’t own.
You’ll need a mortgage or savings for your share, and a deposit (usually 5–10%) based on that portion – not the full property value. This means the deposit for a Shared Ownership home is often significantly lower than buying in the traditional way.
Over time, you can increase your share through a process called ‘Staircasing’, gradually buying more of the home (up to 100% ownership). As your share increases, the rent you pay decreases.
Buying through Shared Ownership will make you a homeowner, meaning you will also be responsible for service charges and maintenance.
Finally, when selling the housing provider usually has the first option to find a buyer before you can sell on the open market. You can use our Affordability Calculator to estimate what you can afford.
Am I eligible for Shared Ownership?
You will be eligible to buy through Shared Ownership if:
- You're aged 18 or older
- You earn less than £90,000 per year in London (£80,000 outside London)
- You're a first-time buyer or selling your current home
- You can't afford to buy a home outright on the open market
- You have a good credit history and no rent or mortgage arrears
Check the full eligibility criteria for more information.
How do Shared Ownership mortgages work?
To buy a home through Shared Ownership, you’ll need to take out a Shared Ownership mortgage to cover the cost of your share in the property.
Unlike buying on the open market, you're only responsible for financing your portion of the home, which makes getting on the property ladder more affordable.
Here's what you’ll need:
- A deposit (often as low as 5–10% of your share). For example, if you're buying a 25% share of a £400,000 home (£100,000 share), a 5% deposit would be just £5,000
- A mortgage for the remainder of your share – Many high-street lenders now offer Shared Ownership mortgage products
- To pass an affordability check – to ensure Shared Ownership is suitable for you
Shared Ownership mortgage rates can vary depending on the lender, deposit size, and your credit score.
What are the pros and cons of Shared Ownership?
You can explore a full breakdown on our pros and cons page, here is a quick overview:
Pros:
- Smaller deposit & mortgage – You only need a deposit and mortgage on your share, making it more affordable with lower upfront costs.
- Option to increase ownership – You can buy more shares over time through staircasing, potentially up to 100% meaning you stop paying rent.
- High-quality new builds – Most homes are new builds, energy-efficient, and built to modern standards.
Cons:
- Limited mortgage options – Not all lenders offer Shared Ownership mortgages, so your choices may be more limited, though most major banks do support them.
- Restrictions on alterations – You can decorate inside, but structural changes or major improvements usually require permission from your housing provider.
- Subletting isn’t allowed – You generally can’t rent out your Shared Ownership home, as it's intended for your primary residence.
What are the costs involved with Shared Ownership?
Buying a Shared Ownership home comes with a range of costs, both upfront and ongoing.
An example of Shared Ownership expenses:
- Full market value: £388,000
- 25% share: £97,000
- 10% deposit: £9,700
- Monthly mortgage: £465
- Monthly rent (on 75%): £666
- Monthly service charge: £253
To help work out if Shared Ownership is right for you, take a look at our Affordability Calculator.
Total monthly cost: £1,384*
*This is an indicative example for guidance only and you should speak to an Independent Mortgage Advisor for more details about costs of buying with Shared Ownership.
Deposit
One of the key benefits of Shared Ownership is the lower deposit requirement compared to buying a home outright. Instead of needing a deposit based on the full property value, you only need to put down a deposit on the share you're buying - usually 5 - 10% of that share. E.g. for a 25% share of a £388,000 home, a 10% deposit would be £9,700.
Rent
Rent is paid on the share you don’t own. At Peabody it's up to 2.75% of the remaining equity per year. For example, on a 75% share of a £450,000 home, you might pay around £773 per month.
Service Charge
As a Peabody leaseholder, you’ll be required to pay a monthly service charge, which covers the ongoing maintenance and management of the communal areas within your development.
At Peabody, we aim to keep service charges fair, transparent, and easy to understand. Typical costs may be around £253 per month, although this can vary depending on the development and the level of services provided.
Ground Rent
At Peabody we’re pleased to say that there is no ground rent to pay on any of our new Shared Ownership homes. This reflects recent changes in leasehold regulations and our commitment to offering fair, transparent terms for our residents.
If you’re considering one of our pre-owned (resale) Shared Ownership homes, there may be ground rent charges, depending on the terms of the original lease. Ground rent isn’t standard across all properties, so the exact cost will vary. Rest assured, all costs will be clearly outlined upfront during the buying process.
Stamp Duty
Stamp duty can be paid either on your initial share or on the full market value upfront. Learn more about how stamp duty works on Shared Ownership.
Other upfront costs:
- £500 reservation fee
- £700 solicitor’s fee
- £600 legal disbursements
- £400 mortgage adviser fee
- £0–£800 mortgage valuation fee
- £0–£999 mortgage arrangement fee
How does Staircasing work?
Staircasing is the process of buying more shares in your home, usually in 10% increments. Over time, you could own 100% and pay no rent.
Most buyers staircase 2 or 3 times. Each time you staircase, your property will need to be revalued, as you will be buying shares of the property at its current value, not the value when you bought the initial share. Therefore staircasing will include some valuation and legal fees.
The 25% steps shown are for illustration purposes — you can staircase in smaller or larger amounts depending on what suits your budget.
Finding a Shared Ownership home
Peabody offers a wide range of Shared Ownership homes across London and the South East, including:
- City Angel (Islington) – Studio apartments with premium amenities
- New Mansion Square (Wandsworth) – 1-bedroom homes
- The Verdean (Acton) – 1-bedroom apartments
- Zone at Oval Village (Lambeth) – Studio to 2-bed homes
- The Aviary (Oxford) – 2 & 3-bed houses with gardens
How can you sell a Shared Ownership home?
You can sell your Shared Ownership property at any time. The housing association will have "first refusal" for a set period (with Peabody it is 4 weeks). If they don’t find a buyer in that time, you can sell it on the open market.
Your share is sold at current market value, and you benefit from any increase in value based on your owned percentage.
Frequently Asked Questions about Shared Ownership
They include mortgage repayments, rent on the unowned share, and service charges. A typical example could total around £1,384/month.*
*This is an indicative example for guidance only and you should speak to an Independent Mortgage Advisor for more details about costs of buying with Shared Ownership.
Most Shared Ownership homes come with a 250 to 999-year lease, so lease extension may not be necessary for a long time.
Yes, you can decorate a Shared Ownership home, and cosmetic changes like painting, hanging pictures, or choosing your own interior style are usually allowed without permission. Since most properties are new builds, you’ll often have a blank canvas to work with. However for major changes such as removing walls or making structural alterations, you’ll need to get approval from the housing provider before going through with it.
Yes, you can. Shared Ownership gives you the option to eventually own your home outright through Staircasing. This means you can gradually buy more shares in your property over time, depending on your financial situation. In most cases, you can staircase all the way up to 100% ownership, at which point you’ll no longer pay rent on the remaining share - just your mortgage (if applicable) and any service charges.
Yes, Shared Ownership allows joint applications, which can be a great option for couples, friends, or family members who want to buy a home together. All applicants must individually meet the eligibility criteria, which typically includes income thresholds, being a first-time buyer (or someone who doesn’t currently own a home), and demonstrating the ability to afford the costs involved.
