Shared Ownership can be one route onto the property ladder for buyers who cannot afford to purchase a suitable home outright on the open market. In London, where property prices are among the highest in the UK, it is a route that many first-time buyers consider. But it is not the right answer for everyone, and it has genuine drawbacks alongside its advantages. This guide explains honestly how Shared Ownership works, what it costs, what it means for your mortgage, and how to weigh up whether it is worth it for your circumstances. For an overview of our London mortgage services, see our London office page.
Shared Ownership has had mixed coverage in recent years, with some owners reporting frustrations around service charges, selling, and the combined cost of mortgage and rent. We think the honest position is that it suits some buyers well and others poorly, and the difference usually comes down to the specific property, the lease terms, and how long you plan to stay. The detail matters.
How Shared Ownership Works
Shared Ownership allows you to buy a share of a property and pay rent on the remaining share to a housing association or other registered provider. Initial shares are typically between 10% and 75%, although this depends on the scheme, provider, and current GOV.UK eligibility rules. You take out a mortgage on the share you buy, and the deposit you need is based on that share, not the full market value.
As an illustration: if the full market value of a property is £400,000 and you buy a 40% share, you are purchasing £160,000 worth of the property. Your deposit and mortgage are based on that £160,000, not the full £400,000. You then pay rent to the housing association on the 60% you do not own. This share-based deposit is the main reason Shared Ownership can bring a London purchase within reach when an open-market purchase is not affordable.
Over time, you may be able to buy additional shares in the property, a process known as staircasing, potentially up to full ownership depending on the lease, scheme, and provider. Each time you staircase, the share price is based on an independent valuation at the time, not the original purchase price.
Who Is Eligible in London?
Shared Ownership is aimed at people who cannot afford to buy a home suitable for their needs on the open market. Income limits apply and are set by scheme rules. In London, the household income cap is £90,000 a year, compared with £80,000 elsewhere in England (GOV.UK). Buyers should confirm the current eligibility position before applying.
You must generally be a first-time buyer, a previous homeowner who cannot afford to buy now, or an existing shared owner looking to move. Eligibility criteria are set by the housing provider and can vary by scheme, and some London developments apply local connection or local priority requirements. It is worth checking the specific requirements for the development you are interested in.
Finding Shared Ownership Properties in London
Shared Ownership properties in London are available through registered housing providers across the capital. The Homes for Londoners portal, run by the Greater London Authority, lists shared ownership and other affordable housing options across London. Share to Buy (sharetobuy.com) is a national portal that also covers London developments.
Availability, phases, and scheme terms change frequently, so it is worth checking the current position with the relevant housing provider before you reserve. London has a significant volume of Shared Ownership stock, much of it in new-build apartment developments, which makes the leasehold and service charge considerations below particularly relevant.
How Shared Ownership Affects Your Mortgage
You take out a mortgage on the share you are buying, not the full market value. This means you borrow less, which can make the affordability assessment easier to pass. Some lenders have specific Shared Ownership products, and not all lenders offer them, so a broker can help you identify which lenders are suitable for a Shared Ownership purchase.
Your monthly costs include your mortgage repayment, plus rent on the share you do not own, plus any service charge. This is the most important point to understand about Shared Ownership affordability: lenders assess your total monthly commitment — mortgage, rent, and service charge — when deciding how much they are willing to lend. The rent and service charge therefore reduce your borrowing capacity. A property that looks affordable on the mortgage alone may not be once rent and service charge are included, so it is important to model the full monthly cost before committing.
Staircasing: Buying More of Your Home Over Time
Staircasing allows you to buy additional shares in your property over time. Each time you staircase, the share is valued at its current market value, not the original price. If the property has increased in value since you bought, each additional share will cost more than the equivalent share at the original price.
You may be able to staircase up to 100% ownership, depending on the lease, scheme, and provider. At that point you would own the property and no longer pay rent to the housing provider. However, staircasing involves costs including a valuation fee, legal fees, and potentially a new mortgage application. In London, where property values are high, the cost of staircasing can be substantial if values rise after purchase. Whether staircasing makes financial sense depends on how the property’s value has changed, the cost of additional borrowing, and your wider financial position. It is also worth noting that, in some cases, even after staircasing to 100% the property may remain leasehold, so the usual leasehold considerations continue to apply.
Costs to Understand Before You Commit
Rent on the unowned share. You pay rent to the housing provider on the share you do not own. Rent reviews are set out in the lease and, in many cases, increases are linked to inflation, often with a small additional percentage on top. Over time, this means your rent typically rises each year, so it should not be assumed to stay flat.
Service charge. Many Shared Ownership properties, particularly flats, carry a service charge for the maintenance of communal areas. In London apartment blocks, service charges can be significant and can increase over time, sometimes by more than buyers expect. Because much London Shared Ownership stock is in new-build blocks, understanding the current charge and how it is reviewed is essential before you commit.
Repairs and maintenance. Depending on the terms of your lease, you may be responsible for repairs and maintenance costs, in some cases for the whole property rather than just your share. The exact position depends on the lease and the age of the scheme, so check this carefully.
Mortgage repayments. Your mortgage covers the share you own. As with any mortgage, the monthly repayment depends on the amount borrowed, the interest rate, and the term.
Staircasing costs. Each time you buy an additional share, you will need a new valuation and may need legal advice. If you need additional borrowing, this will involve a new mortgage application or further advance.
Stamp duty. There are two methods for calculating Stamp Duty Land Tax on Shared Ownership purchases. You may be able to pay SDLT only on the share you are buying rather than the full market value. Your solicitor can confirm which method applies and how much you would pay. For worked examples at London price points, see our London stamp duty guide.
Selling a Shared Ownership Property
Selling a Shared Ownership property can take longer than selling a standard property. The housing provider usually has a nomination period, set out in your lease, during which they have the right to find a buyer from their waiting list before you can list on the open market. This is worth understanding at the outset, particularly if you might need to move at relatively short notice. Your solicitor should confirm the resale terms of your lease before you agree to buy.
Is Shared Ownership Worth It in London?
This depends on your circumstances and your alternatives. There are genuine advantages and genuine drawbacks, and it is worth being clear-eyed about both.
The case for. Shared Ownership reduces the deposit you need, which in a market like London can make the difference between buying and continuing to rent for the foreseeable future. It gives you security of tenure and the potential to build equity over time. For buyers whose income falls within the £90,000 London cap and who cannot raise an open-market deposit, it can be a realistic route onto the ladder that would not otherwise exist.
The case against. You pay both a mortgage and rent, and the combined cost — together with the service charge — can be higher than buyers expect. Service charges on London flats can be significant and can rise. Rent typically increases each year. Staircasing to full ownership can be expensive if values have risen. Selling can be slower and more restricted than a standard property. And many Shared Ownership properties are leasehold, with the considerations that brings.
Shared Ownership is often better suited to buyers planning to remain in the property for a number of years, as the costs of buying and later selling can be easier to absorb over a longer period. For someone expecting to move again within two to three years, the transaction costs can make it a less attractive option than renting. The decision comes down to whether Shared Ownership gives you a realistic and affordable route into homeownership that you would not otherwise have, and whether the total monthly cost — mortgage, rent, and service charge — is sustainable for you over the period you plan to stay. For more on the leasehold considerations that apply to most Shared Ownership flats, see our leasehold guide.
Why We Wrote This Guide
Fitch & Fitch is an independent, whole-of-market mortgage broker with offices in Canary Wharf, Cambridge, and Colchester. We are an appointed representative of JLM Mortgage Network, authorised and regulated by the Financial Conduct Authority (FCA Registration Numbers 955014 and 300629). You can verify this on the FCA Register at register.fca.org.uk.
Fitch & Fitch has received recognition from independent industry bodies including the Mortgage Strategy Awards, Mortgage Introducer Awards, and Legal & General Mortgage Club Awards. These awards are judged independently and can be verified on the respective awards websites.
We wrote this guide because we believe an informed buyer makes better decisions — including, where appropriate, deciding that Shared Ownership is not the right route for them. For further information about our London mortgage services, visit our London hub page at fitchandfitch.co.uk/offices/london.
Frequently Asked Questions
What is the maximum income for Shared Ownership in London?
In London, the household income cap for Shared Ownership is £90,000 a year, compared with £80,000 elsewhere in England (GOV.UK). This is a cap, not a target — you also need to demonstrate that you cannot affordably buy a suitable home on the open market, and meet the housing provider’s and lender’s affordability criteria. Confirm the current rules before applying.
Is Shared Ownership worth it in London?
It can be, for buyers who cannot raise an open-market deposit and who plan to stay in the property for the medium to long term. The key is to model the full monthly cost — mortgage, rent, and service charge — and to understand the lease, resale, and staircasing terms before committing. It tends to be less suitable for those expecting to move again within a couple of years, given the transaction costs involved.
How much deposit do I need for Shared Ownership in London?
You need a deposit based on the share you are buying, not the full property value. Deposit requirements vary by lender, scheme, and circumstances, and in some cases lenders will consider relatively small deposits on the share being purchased. Because the deposit is calculated on the share rather than the full value, the cash sum required can be considerably lower than for an open-market purchase at the same address.
Why do some people say Shared Ownership is bad?
Common criticisms relate to the combined cost of mortgage plus rent, service charges that rise over time, the cost and complexity of staircasing if values increase, and the restrictions and slower process around selling. These are genuine considerations. Whether they outweigh the benefit of getting onto the ladder depends on the specific property, the lease terms, and how long you plan to stay — which is why it is important to assess the full picture rather than relying on either positive or negative generalisations.
Can I staircase to 100% ownership?
In many cases, yes, but it depends on the lease, scheme, and provider. The cost of each additional share is based on the property’s current market value at the time, not the original price. Staircasing involves valuation and legal costs, and you may need a new mortgage application. In London, where property values are high, the cumulative cost of staircasing to full ownership can be substantial. In some cases the property may remain leasehold even after staircasing to 100%.
What happens if I want to sell?
The housing provider usually has a nomination period, which varies by scheme, during which they can find a buyer from their waiting list. If they do not find a buyer within this period, you can usually sell on the open market. The process can take longer than a standard sale, and your solicitor should confirm the terms of your lease before you agree to buy.
Do I pay stamp duty on a Shared Ownership purchase?
There are two methods for calculating SDLT on Shared Ownership purchases. You may be able to pay stamp duty only on the share you are buying rather than the full market value. Your solicitor can confirm which method applies. See our stamp duty guide for further context.
Is Shared Ownership only for first-time buyers?
No. You can also qualify if you are a previous homeowner who cannot afford to buy now, or an existing shared owner looking to move. Eligibility criteria vary by scheme and housing provider.
Next Steps
If you are considering Shared Ownership in London, a useful first step can be understanding what you can afford — including the combined cost of mortgage, rent, and service charge — and which lenders offer Shared Ownership products. This helps you compare it fairly against your alternatives, including continuing to rent or saving towards an open-market purchase.
For further information about our London mortgage services, visit our London hub page.
Related Guides
How Much Deposit Do You Need to Buy in London?
First-Time Buyer Mortgages in London
How Much Can I Borrow for a Mortgage in London?
The information above is for general guidance only and does not take account of your personal circumstances. Shared Ownership terms, eligibility, rent reviews, and availability vary by housing provider and development and should be confirmed before you commit.