The UK’s annual inflation rate, measured by the Consumer Prices Index (CPI), reached 3.8% in July 2025 – its highest level since January 2024. The rising cost of living continues to make housing less affordable, particularly in London. This means buyers are increasingly looking to Shared Ownership as a way to get on the property ladder.
How much is rent in London per month?
Rents have also been increasing over the last few years. The general guidance is that households should spend no more than 30% of their income on rent. However, in 2024 private renters in England were already spending 36.3% of their income on rent , and in London the pressure is even greater, with private renters spending an average of 41.6% of their income on housing costs.
The eye-watering average rent for a place in London has surged to £2,249 as of May 2025, according to the ONS.
Since May 2021, the asking rent in London has increased by a whopping £537, which is a 31% rise. The picture is similar for those outside London who have been hit with a 28% increase in asking rent, from an average of £787 in May 2021 to £1,006 in May 2025.
The story is similar in shared houses, as in Q4 2025, renters expected to pay an average of £985 a month for a room .
The continued mismatch between demand from tenants and supply from landlords has fuelled the sharp increases in rents. Landlords have been hit with rising costs and significant increases in mortgage rates.
As with London, the affordability of renting remains at its worst level in at least a decade across much of the UK as we enter 2026.
The latest Office for National Statistics (ONS) private rental affordability data (Financial Year Ending 2024, released in 2025) show that rents were rising at their fastest sustained pace since comparable records began in 2016, placing continued pressure on household finances.
In England, private renters on a median household income were spending an average of 36.3% of their income on rent, well above the commonly used 30% affordability threshold.
Why Shared Ownership can help
Many first-time buyers have been able to step onto the property ladder using Shared Ownership, where you can buy a share of your home. As you are only need to get a mortgage on the share of the home you buy (typically 25% initially), you will need a much smaller deposit compared to buying on the open market.
You will then pay rent on the part you don't own as well as a service charge to make up your monthly home cost, which in some cases can be less than if you were to rent privately.
Is renting better than Shared Ownership?
Cons of renting versus Shared Ownership:
Paying rent won’t get you closer to home ownership
You might be able to save some money on the side, but your monthly rent will not buy you any part of a property. Renting is sometimes seen as ‘dead money’ that helps you pay for living day to day, but doesn’t lead to permanent ownership. In other words, it’s not the best option if you want to own some of your own property, like the various Shared Ownership homes Peabody offers across London.
Learn more about Shared Ownership
You may have to pay a large deposit for the first month
Renting a home usually involves paying a hefty deposit of one month’s rent in advance – sometimes it can even be more! The government now has a scheme in place to protect your deposit, but there is a chance you could lose it if you get into a dispute with your landlord.
You are dependent on your landlord
Have you ever heard a horror story about a friend of a friend’s landlord? You’re not the only one. Renting a home means that your landlord is in control of rent increases, repairs, and even has the power to terminate your tenancy if circumstances change. If you are unlucky enough to get a bad landlord, life could get unpleasant!
Pros of renting versus Shared Ownership
More flexibility
If you prefer a spontaneous ‘pick up and go’ lifestyle, renting is a decision that will make more sense. While putting money towards owning a property will keep you bound to a home in a specific place, renting will enable you to move, live and travel as you please.
Good if you need something temporary and affordable
Renting is often a logical first step before buying a full property. Why? Because paying monthly rent is cheaper than buying a home outright, and makes for a convenient temporary option. As most rental properties come with short-term leases, you can easily move home if you are not a big fan of the location!
You don’t need to pay repair costs
Not owning your home comes with some hidden advantages. As you are renting someone else's property, this means that your landlord is responsible for paying for any fixes or repairs. That is, if you can convince them!
Is Shared Ownership a good idea?
The benefits of Shared Ownership:
Cheaper than renting in London for certain areas
In London, rental prices have reached an all-time high. This means that opting for a Shared Ownership property can save you money and be well worth picking over renting.
For example, for a 1-bed apartment at New Mansion Square, the average monthly cost after buying through Shared Ownership would be £1,991. A similar 1-bed within a half-mile radius of New Mansion Square would cost on average £2,851 a month to rent. This means an average saving of £860!
You can find out more about how Shared Ownership can save renters in London money by checking out our article.
Cost of buying through Shared Ownership
Easier than buying a home outright
If you want a little taste of full home ownership without paying through the nose, Shared Ownership is a much easier way to go about it.
For starters, the initial deposit you pay for your share of the house is much smaller than what you would normally pay for full ownership.
Many Shared Ownership owners noted that the monthly cost of Shared Ownership mortgage repayments were lower than the cost of rent!
You can buy even more shares in your property
Say your job changes or you suddenly win the lottery. With a Shared Ownership property, you can invest in even more shares towards your property – this is known as ‘Staircasing’.
More shares in your property means that you pay less in rent! To find out more about Staircasing, check out Peabody’s handy Staircasing guide.
Most Shared Ownership homes are brand new
Love the feeling of unwrapping new things? One of the biggest benefits of Shared Ownership homes is that they are usually new build properties with fresh fixtures and appliances.
As well as saving you the trouble of paying towards repairs in the near future, you can decorate your new home as you wish, turning your new house into a place you can call home.
For those looking at part buy part rent London schemes, this often means access to high-quality, modern homes in areas that might otherwise feel out of reach.
The disadvantages of Shared Ownership:
Most Shared Ownership homes are leasehold
As you don’t own the property, your right to live in a Shared Ownership home comes down to a lease. This means that, like with renting, you could be evicted if you fail to pay the rent or do something to endanger yourself or others. This means potentially losing the part of the home that you ‘bought’.
However, for the vast majority of residents who meet their obligations, this is not an issue – leasehold ownership is the standard model for most flats in the UK, not just Shared Ownership.
You may have to pay additional costs
Shared Ownership is a much more affordable route to owning your own home, but you also need to be aware of the additional costs!
Shared Ownership means you have to pay service charge towards the upkeep of your home, and might even be liable to pay stamp duty if you aren’t a first-time buyer.
These are not unique to Shared Ownership though, they are the same types of costs that most leasehold buyers would face on the open market. The key difference is that Shared Ownership makes the entry point to ownership more manageable, even with these extras.
You might be restricted on home improvements
While you can style the interior of a Shared Ownership home as you please, any wider home improvements will require the permission of your housing provider.
This means that if you suddenly get the impulse to install a plush new loft space, you may need to hold yourself back! For most homeowners, it doesn’t get in the way of enjoying or personalising their space.
Shared Ownership vs Renting - who comes out on top?
Deciding between Shared Ownership and renting will ultimately depend on what you need from your new home. If you are not yet ready to commit yourself to a permanent location, renting might be best. But if you want to secure your future in an area you love, Shared Ownership can be well worth it as an affordable route to owning your own home!
Many of our homeowners talk about how Shared Ownership has improved their circumstances when compared to renting by offering security and lower monthly costs. Read some of homeowner stories such as Bridget at Honeybrooke or Clement at Macfarlane Place for more details.
Want to learn more about the ins and outs of Shared Ownership? Peabody New Homes created a Shared Ownership guide to help you understand this affordable alternative to buying a home outright in London and the home counties!
Frequently asked questions about Shared Ownership vs renting
Shared Ownership lets you buy a share of a home (often from 25% to 75%) and pay rent on the portion you don’t own. Over time, you can staircase (buy more shares) to increase your equity.
It can be, especially in higher‑cost areas, because your monthly cost combines a mortgage on your share, rent on the unsold share, and any service charge. Whether it beats renting depends on deposit size, share purchased, rent on the unsold share, service charges, mortgage rate, and local rents.
For Shared Ownership, your deposit is a percentage of the share you purchase (e.g., 5 - 10% of your share), which can be much smaller than a deposit on the full purchase price. Renting usually needs one month’s rent (sometimes more) upfront plus a refundable tenancy deposit. Good for flexibility, but it doesn’t build equity.
