# Shared Ownership — How It Works > **Figures in this document are current as of 16 May 2026.** Rent rates, income caps and lease terms are set out in scheme guidance and individual leases; always verify against the provider's own *Key Information Document* before committing. Costs are in GBP £. --- ## TL;DR Shared Ownership is the UK government's part-buy / part-rent affordable-housing scheme. You buy a **share of a leasehold home** (typically a flat, sometimes a house) with a mortgage and deposit, and pay **subsidised rent** to a housing association on the share you do **not** own. The old scheme allowed initial shares of **25%–75%**; the **new 2021 model** allows from **10%–75%** and adds major lease improvements: a **990-year lease**, a **10-year landlord repairs contribution (up to £500/yr)**, and **1% gradual staircasing** for the first 15 years. You can buy further shares over time ("staircasing"), usually up to 100% — except in **designated protected (rural) areas** where staircasing may be capped at 80%. **Older leases (99/125 years) make the leaseholder fully liable for all repairs from day one, even on a tiny share** — this is the single biggest trap. Income caps: **£80,000 outside London / £90,000 in London**. [source: Shared ownership homes — GOV.UK](https://www.gov.uk/shared-ownership-scheme) --- ## What Shared Ownership Is You buy a **share of a property** (a percentage of its market value) and **pay rent to a landlord on the remaining share you do not own**. [source: Shared ownership homes — GOV.UK](https://www.gov.uk/shared-ownership-scheme) The home is held on a **leasehold** basis — even Shared Ownership houses are normally sold leasehold, not freehold, until you staircase to full ownership. [source: Shared Ownership Leases — LEASE](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) You take out a **mortgage to buy your share, or pay for it with savings**, and pay a **deposit, usually between 5% and 10% of the share you are buying** (not 5–10% of the whole property — a key affordability advantage). [source: Shared ownership homes — GOV.UK](https://www.gov.uk/shared-ownership-scheme) You also typically pay **monthly service charges** (and, on older leases, ground rent) on top of rent and mortgage. [source: Shared ownership scheme — Money Saving Expert](https://www.moneysavingexpert.com/mortgages/shared-ownership-scheme/) It is **not** US-style "co-ownership" between two private buyers — the counterparty is always a registered provider / housing association. --- ## Share Ranges: Old Scheme vs 2021 Model | Feature | Old scheme (pre-April 2021) | New 2021 model (post-April 2021) | |---|---|---| | Minimum initial share | **25%** | **10%** | | Maximum initial share | **75%** | **75%** | | Lease length | **99 or 125 years** typical | **990 years** | | Repairs on small share | **Leaseholder fully liable from day one** | **Landlord contributes up to £500/yr for first 10 years** | | Minimum standard staircasing step | **10%** (often) | **5%**, plus **1% per year** option | | Resale nomination period | **8 weeks** | **4 weeks** (owner can cut to 4) | The government reduced the **minimum initial share from 25% to 10%** under the new model, and increased the **minimum lease term from 99 years to 990 years**. [source: Shared ownership homes — GOV.UK](https://www.gov.uk/shared-ownership-scheme) [source: Introducing the new Shared Ownership model — Share to Buy](https://www.sharetobuy.com/shared-ownership/introducing-the-new-shared-ownership-model/) On gov.uk's own framing, you can buy a share **"between 10% and 75% of the home's full market value,"** though in practice shares are **"usually between 25% and 75%"** and the **10% share is available only on some homes**. [source: Shared ownership homes — GOV.UK](https://www.gov.uk/shared-ownership-scheme) The new model applies to **all new grant-funded Shared Ownership homes delivered through the Affordable Homes Programme 2021–2026** and Shared Ownership homes delivered through Section 106. [source: Shared Ownership older leases / new model — LEASE & GOV.UK](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) --- ## Rent on the Unowned Share Rent is charged on the **share the landlord retains**, not the share you own. The standard initial rent rate is **2.75% of the value of the retained (unowned) equity per year, and no more than 3%**. [source: FAQs: Buying a home through Shared Ownership — Share to Buy](https://www.sharetobuy.com/shared-ownership/faqs-buying-a-home-through-shared-ownership/) [source: Shared ownership scheme — Money Saving Expert](https://www.moneysavingexpert.com/mortgages/shared-ownership-scheme/) Rent is calculated on the **unowned share value at the time of legal completion**. [source: FAQs: Buying a home through Shared Ownership — Share to Buy](https://www.sharetobuy.com/shared-ownership/faqs-buying-a-home-through-shared-ownership/) **Example of the rent formula** (Money Saving Expert): buy a **40% share of a £200,000 property** → rent is **2.75% of the £120,000 (60%) you don't own ≈ £275/month (£3,300/year)**. For a £400,000 property at 40%, the unowned £240,000 → **≈ £550/month (£6,600/year)**. [source: Shared ownership scheme — Money Saving Expert](https://www.moneysavingexpert.com/mortgages/shared-ownership-scheme/) ### Annual rent increases Rent is **reviewed each year**. Under typical older leases the increase is **RPI + 0.5%**; the increase mechanism is set out in your specific lease and varies by provider. [source: FAQs: Buying a home through Shared Ownership — Share to Buy](https://www.sharetobuy.com/shared-ownership/faqs-buying-a-home-through-shared-ownership/) Newer 2021 model leases issued from October 2023 onward use **CPI + 1%** (a CPI-linked formula replaced RPI in newer model leases). Because rent rises with an index **plus an uplift**, the longer you stay below 100%, the more the rent compounds — a key reason to staircase. [source: Shared ownership rent increase — Money Saving Expert forum](https://forums.moneysavingexpert.com/discussion/6219826/shared-ownership-rent-increase) ### How rent reduces as you staircase When you buy more shares, the landlord's retained equity shrinks, so **rent falls proportionally**: "your mortgage will increase while your rental payments will decrease at the same time." At **100% ownership you stop paying rent altogether**. [source: Shared Ownership Staircasing Guide — Share to Buy](https://www.sharetobuy.com/shared-ownership/shared-ownership-staircasing-guide/) --- ## Staircasing — Buying Further Shares "Staircasing" is the process of buying additional shares in your home over time; **if you buy more shares, you pay less rent**. [source: Shared ownership homes — GOV.UK](https://www.gov.uk/shared-ownership-scheme) ### Valuation basis Each staircasing transaction is priced on the **current market value at the time you buy**, established by a **surveyor registered with the Royal Institution of Chartered Surveyors (RICS)**, which you must pay for. [source: Buying more shares (staircasing) — GOV.UK](https://www.gov.uk/shared-ownership-scheme/buying-more-shares-staircasing) This means staircasing in a rising market costs more than your original share — you buy at the new, higher valuation, not the original price. ### Minimum staircasing increments (old vs new) - **Older leases:** may restrict purchases to **25% or more** per step. [source: Buying more shares (staircasing) — GOV.UK](https://www.gov.uk/shared-ownership-scheme/buying-more-shares-staircasing) - **Standard staircasing:** "You can usually buy shares of **10% or more** at any time"; newer leases allow **5% or more**. [source: Buying more shares (staircasing) — GOV.UK](https://www.gov.uk/shared-ownership-scheme/buying-more-shares-staircasing) Share to Buy notes the minimum standard step under the new model is **5%** (above and not including the 1% route). [source: Shared Ownership Staircasing Guide — Share to Buy](https://www.sharetobuy.com/shared-ownership/shared-ownership-staircasing-guide/) - **1% gradual staircasing (2021 model only):** For homes purchased **after 1 April 2021**, you may buy **1% shares each year for the first 15 years**, with **heavily reduced fees and no requirement for an independent valuation**. The 1% price is **based on the original price of your home, adjusted up or down in line with the House Price Index (HPI)** — *not* a fresh market valuation. **You cannot roll over unused 1% options to future years.** [source: Buying more shares (staircasing) — GOV.UK](https://www.gov.uk/shared-ownership-scheme/buying-more-shares-staircasing) [source: Shared Ownership Staircasing Guide — Share to Buy](https://www.sharetobuy.com/shared-ownership/shared-ownership-staircasing-guide/) (Note: Share to Buy describes the gradual route as "1% each year for 15 years"; gov.uk frames it as the **first 15 years**. The Affordable Homes Programme 2021–2026 lease offers a 15-year window of 1% staircasing — confirm exact terms in your lease/KID.) [source: Introducing the new Shared Ownership model — Share to Buy](https://www.sharetobuy.com/shared-ownership/introducing-the-new-shared-ownership-model/) ### Costs of staircasing - **RICS valuation fee** (you pay), unless using the 1% route. [source: Buying more shares (staircasing) — GOV.UK](https://www.gov.uk/shared-ownership-scheme/buying-more-shares-staircasing) - **Landlord administration fee** for each standard share of 5%+: **around £150 to around £500**. [source: Buying more shares (staircasing) — GOV.UK](https://www.gov.uk/shared-ownership-scheme/buying-more-shares-staircasing) - **Your own legal/conveyancing fees.** [source: Buying more shares (staircasing) — GOV.UK](https://www.gov.uk/shared-ownership-scheme/buying-more-shares-staircasing) - **Mortgage costs** (further advance or remortgage; lender fees vary). [source: Shared Ownership Staircasing Guide — Share to Buy](https://www.sharetobuy.com/shared-ownership/shared-ownership-staircasing-guide/) - **Stamp Duty Land Tax** considerations apply once your owned share reaches the relevant thresholds (commonly around 80%+, depending on the SDLT election made at first purchase). [source: Shared Ownership Staircasing Guide — Share to Buy](https://www.sharetobuy.com/shared-ownership/shared-ownership-staircasing-guide/) - Share to Buy suggests budgeting **around £2,000** for a standard staircasing transaction. [source: Shared Ownership Staircasing Guide — Share to Buy](https://www.sharetobuy.com/shared-ownership/shared-ownership-staircasing-guide/) ### Final staircasing to 100%, and when 100% is not possible Most shared owners **can staircase all the way to 100%**, at which point rent stops. [source: Shared Ownership Staircasing Guide — Share to Buy](https://www.sharetobuy.com/shared-ownership/shared-ownership-staircasing-guide/) Maximum ownership is **100% for most homes**, but with two notable exceptions: - **Designated protected areas (rural exception sites):** staircasing may be **restricted to a maximum of 80%**, to keep rural affordable housing in the hands of local people. Alternatively, the lease may permit >80% but **oblige the landlord to repurchase the home when you sell**. [source: Buying more shares (staircasing) — GOV.UK](https://www.gov.uk/shared-ownership-scheme/buying-more-shares-staircasing) [source: AHP 2021–2026 — 80% restricted staircasing KIDs — GOV.UK](https://www.gov.uk/government/publications/affordable-homes-programme-2021-to-2026-shared-ownership-homes-in-a-designated-protected-area-80-restricted-staircasing-key-information-documents) - **Older Persons Shared Ownership (OPSO):** staircasing is **capped at 75%** (no rent is then charged on the remaining 25%). [source: Buying more shares (staircasing) — GOV.UK](https://www.gov.uk/shared-ownership-scheme/buying-more-shares-staircasing) On a freehold **house** bought through Shared Ownership, staircasing to 100% usually means you acquire the freehold; on a **flat** you continue to hold a (long) lease even at 100%. [source: Shared Ownership Leases — LEASE](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) --- ## New 2021 Model Lease Improvements The new model (Affordable Homes Programme 2021–2026 / Section 106) introduced: 1. **990-year lease term** — leases on new-build homes increased from 99 to 990 years, removing the future cost and hassle of lease extension. [source: Shared Ownership older leases / new model — LEASE & GOV.UK](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) 2. **10-year repairs & maintenance contribution** — for the first 10 years the **landlord supports the shared owner with essential repair costs**: shared owners can claim **up to £500 per year**, with any excess being the owner's responsibility, and **one year's unused allowance can be rolled over** into the following year. If the home is resold through Shared Ownership within the 10-year period, the **remaining years transfer to the new shared owner**. [source: Shared Ownership older leases / new model — LEASE & GOV.UK](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) [source: Introducing the new Shared Ownership model — Share to Buy](https://www.sharetobuy.com/shared-ownership/introducing-the-new-shared-ownership-model/) 3. **1% gradual staircasing** — buy in 1% instalments for the first 15 years with heavily reduced fees and no independent valuation (see Staircasing section). [source: Shared Ownership homes — GOV.UK](https://www.gov.uk/shared-ownership-scheme) 4. **New resale rules** — the resale **nomination period is reduced from 8 weeks to 4 weeks**, and the shared owner can choose to end the period at the 4-week mark to pursue an open-market sale, giving more control over selling. [source: Shared Ownership older leases / new model — LEASE & GOV.UK](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) --- ## Older Leases (99 / 125 Years) — Read This Carefully > ⚠️ **The biggest trap in Shared Ownership.** On older-model leases (typically **99 or 125 years**), the **leaseholder is fully responsible for all repair and maintenance costs from the day of completion — including routine repairs, major structural repairs and improvements — regardless of how small a share they own.** You can own just 25% of the property but still be liable for **100% of the repair bill**. [source: Shared Ownership older leases — LEASE & GOV.UK](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) This is why the **2021 model's 10-year repairs contribution** (up to £500/yr from the landlord) was introduced — it directly addresses this long-standing criticism. It only applies to **new-model homes**; if you buy a resale on an old lease, the old liability rules apply. Older leases also tend to carry **ground rent** and a **shorter lease that depreciates** (and is costly to extend), unlike the 990-year new-model lease. [source: Shared Ownership Leases — LEASE](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) **Practical takeaway:** always confirm the **lease length, lease start date, repairs clause and whether it is a new-model (post-April 2021) lease** before buying. --- ## Eligibility (Outline — see separate eligibility file for detail) To be eligible for Shared Ownership you must generally satisfy: [source: Who can apply — GOV.UK](https://www.gov.uk/shared-ownership-scheme/who-can-apply) - **Household income £80,000 a year or less (£90,000 or less in London).** - You are a **first-time buyer**, or you **used to own a home but cannot afford one now**, or you are forming a new household (e.g. after a relationship breakdown), or an existing shared owner moving, or a homeowner who cannot afford a suitable replacement. - You **cannot afford to buy a suitable home outright** on the open market. - Some homes require a **local connection**; **armed forces personnel get priority** in competition for a home; **age 55+** can use Older Persons Shared Ownership; disabled buyers may use **HOLD**. *(Full eligibility criteria, mortgage requirements and application process are covered in a separate file.)* --- ## Who Provides Shared Ownership Shared Ownership is delivered by **housing associations and other registered providers / registered social landlords**, who act as the landlord for the unowned share. [source: Shared Ownership Leases — LEASE](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) New supply is grant-funded by **Homes England** (and the GLA in London) through the **Affordable Homes Programme 2021–2026** (an £11.5–12bn programme delivering up to ~180,000 homes), and additional Shared Ownership homes arise from **Section 106 planning agreements**, where developers must provide affordable housing as a condition of planning permission. [source: Introducing the new Shared Ownership model — Share to Buy](https://www.sharetobuy.com/shared-ownership/introducing-the-new-shared-ownership-model/) [source: Shared ownership homes — GOV.UK](https://www.gov.uk/shared-ownership-scheme) --- ## Worked Numerical Example > Illustrative only — actual rent rates, service charges and mortgage rates vary by provider and lender. Figures as of 16 May 2026. **Scenario:** A new-build flat with a full market value of **£250,000**, buying a **40% share** under the 2021 model. | Item | Calculation | Amount | |---|---|---| | Full market value | — | £250,000 | | Share purchased (40%) | 40% × £250,000 | **£100,000** | | Unowned share (60%, landlord retains) | 60% × £250,000 | £150,000 | | Deposit (10% of the share) | 10% × £100,000 | **£10,000** | | Mortgage required | £100,000 − £10,000 | **£90,000** | **Estimated monthly outgoings:** | Monthly item | Basis | Approx. amount | |---|---|---| | Mortgage repayment | £90,000 repayment mortgage, 25 yrs, ~5% rate (illustrative) | **≈ £526/month** | | Rent on unowned share | 2.75% × £150,000 ÷ 12 | **≈ £344/month** | | Service charge | Illustrative new-build flat estimate | **≈ £150/month** | | **Total monthly cost** | | **≈ £1,020/month** | The rent figure uses the standard **2.75% of retained equity** rate; the mortgage figure is indicative (depends on rate, term and lender). Service charges on flats "can set you back £100s, even £1,000s, a year" and typically rise over time, so the service-charge line is the most variable. [source: Shared ownership scheme — Money Saving Expert](https://www.moneysavingexpert.com/mortgages/shared-ownership-scheme/) [source: FAQs: Buying a home through Shared Ownership — Share to Buy](https://www.sharetobuy.com/shared-ownership/faqs-buying-a-home-through-shared-ownership/) As you **staircase up**, the **rent line shrinks** (e.g. staircasing from 40% to 60% would cut the rent by roughly a third), while the **mortgage line grows** — and at 100% the rent disappears entirely. [source: Shared Ownership Staircasing Guide — Share to Buy](https://www.sharetobuy.com/shared-ownership/shared-ownership-staircasing-guide/) --- ## Key References - [Shared ownership homes: buying, improving and selling — GOV.UK](https://www.gov.uk/shared-ownership-scheme) - [Buying more shares ('staircasing') — GOV.UK](https://www.gov.uk/shared-ownership-scheme/buying-more-shares-staircasing) - [Who can apply — GOV.UK](https://www.gov.uk/shared-ownership-scheme/who-can-apply) - [Designated protected area — 80% restricted staircasing KIDs — GOV.UK](https://www.gov.uk/government/publications/affordable-homes-programme-2021-to-2026-shared-ownership-homes-in-a-designated-protected-area-80-restricted-staircasing-key-information-documents) - [Shared Ownership Leases — Leasehold Advisory Service (LEASE)](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) - [Shared Ownership Staircasing Guide — Share to Buy](https://www.sharetobuy.com/shared-ownership/shared-ownership-staircasing-guide/) - [Introducing the new Shared Ownership model — Share to Buy](https://www.sharetobuy.com/shared-ownership/introducing-the-new-shared-ownership-model/) - [FAQs: Buying a home through Shared Ownership — Share to Buy](https://www.sharetobuy.com/shared-ownership/faqs-buying-a-home-through-shared-ownership/) - [Shared ownership scheme — Money Saving Expert](https://www.moneysavingexpert.com/mortgages/shared-ownership-scheme/)