We'll explore the costs involved for first time buyers, and also potential options that can help buyers make that first move more affordable, like Shared Ownership.
Shared Ownership changes the picture because you only buy a share of the home to start with, rather than funding the full value up front.
That can reduce the mortgage you need, lower the deposit required and make the income needed to buy feel more realistic.
The quick answer: what you need to earn to buy in London in 2026
As of March 2026, the average house price in London is £542,000.
New data from Zoopla suggests that the average household income needed to buy a home in London is around £101,400 per year, based on a 20% deposit and a mortgage worth 4.5 times annual earnings.
With Shared Ownership, however, buying in London becomes more accessible.
At the more affordable end, you can get a one-bedroom home at Dagenham Green with a full market value of £282,500. This is achievable on a salary of at least £42,389.
So in simple terms, many buyers looking at Shared Ownership in London in 2026 may need a household income somewhere from the mid-£40,000s for some of the more affordable one-beds to £70,000+ for larger homes or higher-value locations.
Also note that the maximum household income you can have to be eligible for Shared Ownership in London is £90,000.
Compare: Salary Needed to buy on the Open Market vs Shared Ownership
What salary do you need to buy on the open market in London?
For many Londoners, the biggest barriers to homeownership isn't the monthly mortgage payment, rather it's earning enough to qualify for a mortgage on the full value of a property and saving for a deposit.
With mortgage lenders usually offering around 4 to 4.5 times annual income, buyers often need a six-figure household income to purchase a home outright in the capital.
Based on average London property prices, a buyer would need a household income of roughly £81,000 - £90,000 to purchase an average flat worth around £430,000 to £455,000, around £120,000 to £140,000 for a typical terraced home costing £560,000 to £640,000, and well over £150,000 for a semi-detached property priced above £700,000.
New data from Zoopla suggests that the average household income needed to buy a home in London is around £101,400 per year.
What salary do you need to buy through Shared Ownership in London?
Shared Ownership can dramatically reduce that income requirement because buyers purchase a share of the property rather than the entire home.
With developments from Peabody, buyers can purchase an initial share of between 25% and 75%, using a mortgage only on that portion while paying subsidised rent on the remaining share (2.75%).
For example, purchasing a 25% share of a £450,000 London apartment would mean securing a mortgage on approximately £112,500 rather than the full £450,000 value.
Using the same lending multiples, the income required could fall from around £90,000 to closer to £45,000 - £60,000, making homeownership accessible to many households who would otherwise be priced out of the London market.
Some Peabody examples include one-bedroom Shared Ownership homes from:
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£83,125 for a 25% share at Southmere (£40,738 minimum income)
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£99,375 for a 25% share at North Gate Park (£43,688 minimum income)
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£99,000 for a 25% share at Lombard Square (£52,642 minimum income)
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£100,750 for a 25% share at The Verdean (£59,068 minimum income)
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£143,750 for a 25% share at Chelsea Botanica (£62,830 minimum income)
Why Shared Ownership changes the numbers
Shared Ownership changes the numbers because you are not trying to borrow against the full market value of a London home on day one.
Instead, you buy a share of the property and pay rent on the part you do not own. That often means a smaller mortgage, a lower deposit requirement and a more realistic route into home ownership for buyers who have savings and a steady income, but cannot quite stretch to buying outright in the area they want to live.
In London, the household income cap is usually £90,000, and buyers must normally be unable to buy a home that meets their needs without support.
For first-time buyers, renters and people moving back onto the ladder, it can make the first step more achievable, especially in boroughs where full purchase prices are high.
How buying a share works (mortgage + rent + service charge)
With Shared Ownership, your monthly costs are split into a few parts. First, there is your mortgage repayment on the share you buy.
This could be 25%, 35%, 40% or another available share, depending on the home and what you can afford.
Because the mortgage is only based on your share, the deposit is also based on that share rather than the full property price, which is one of the main reasons the upfront cost can be lower.
You then pay rent on the share you do not own.
You will also need to pay a service charge that usually covers things like communal areas, building maintenance, management costs and insurance.
The rent reduces if you buy more shares later through Staircasing, but the service charge still needs to be budgeted for as part of your monthly affordability.
Here is an example of the costs of a 1-bed apartment at KEWB:
- Full Value: £432,500
- Share Value (25%): £108,125
- Deposit Required: £10,813
- Monthly Mortgage: £528
- Monthly Rent: £595
- Monthly Service Charge: £219
- Total Monthly Cost: £1,341
Are there other costs to budget for when buying a home through Shared Ownership?
Your deposit is not the only upfront cost to think about when buying a home.
Like most property purchases, buying through Shared Ownership comes with a few extra costs that need to be built into your budget before you reserve.
These costs can vary depending on your solicitor, mortgage lender and the home you choose, but it is useful to have a rough idea of what to expect.
- Reservation fee: £500. This secures the property and is deducted from the final purchase price if you go ahead with the purchase.
- Solicitor’s fee: around £700. This covers the legal work involved in transferring ownership and reviewing contracts.
- Legal disbursements: around £600. These are additional legal costs such as local authority searches and Land Registry fees.
- Mortgage adviser fee: around £400. This pays for professional mortgage advice based on your financial circumstances.
- Mortgage valuation fee: £0-£800. Some lenders charge this to assess the property’s value before offering a mortgage.
- Mortgage arrangement fee: £0-£999. This is a lender fee for setting up your mortgage and may be paid upfront or added to the loan.
Frequently asked questions about how much you need to earn to live in London
The salary you need depends on the home, the share you buy, your deposit and your monthly costs.
Based on current Peabody examples, some one-bedroom Shared Ownership homes in London are achievable with a household income from the low-to-mid £40,000s, while larger homes or higher-value locations require £60,000 - £70,000+.
In London, the household income cap for Shared Ownership is £90,000.
Your deposit is based on the share you buy, not the full market value of the home.
If you buy a 25% share worth £100,000 and need a 10% deposit, you would need £10,000 upfront.
Yes. With Shared Ownership, you pay a mortgage on the share you own and rent on the remaining share (no higher than 2.75%).
You will also pay a service charge, which can cover things like building maintenance and upkeep of shared areas.
Shared Ownership can often be more affordable than renting privately in London. The main difference is that part of your monthly payment goes towards a mortgage on a share you own.
Research has shown that Shared Ownership is a more affordable option than private renting across the UK in most cases. Studies show that in 93% of local authorities, Shared Ownership is projected to be less expensive than renting after 10 years.
You will still need to budget for rent on the unowned share, service charge, bills and other homeownership costs.
