Shared Ownership: Know Before You Buy

Interest rates may be falling, but that doesn’t mean mortgages are suddenly affordable. With rents still high, many tenants are exploring shared ownership as a way onto the property ladder.

The concept isn’t new—it’s been around since the 1980s. But with rapidly rising house prices and government efforts to increase awareness of the scheme, shared ownership is now appealing to many who are keen to finally become homeowners.

So, is it the right move? As with most things, it depends. Read on to learn what to consider before buying into a shared ownership scheme.

Eligibility

There are usually strict criteria for shared ownership schemes regarding your earnings and where you live and/or work. If you do not currently live or work in the borough where you want to buy, you may not qualify. Your eligibility will also depend on whether you will be buying using a joint income (if you are buying with a partner) or whether you will be purchasing as a first-time buyer.

Pitfalls

You may be surprised at how many pitfalls there can be! Here are just a few:

  • Tenant make-up – Many developments include mandatory social housing. If you’re looking at a block of flats, find out: which buildings house social tenants and which are private? Is the unit you’re considering part of a mixed block? Agents aren’t required to disclose this — and often don’t know — but it can significantly affect your experience after moving in.
  • Rent, service charge and ground rent – The property itself might come cheap but what about the annual rent increase and service charge? How fast have these been rising and by how much? Is it a peppercorn ground rent and does the lease have special rules? Sometimes, they can double every X number of years.
  • Staircasing rules – This refers to increasing your share of the property by buying more in stages. How quickly, how many times and by how much (%) are you allowed to increase your share in the scheme? You may be surprised to discover you can only increase your share twice, for example.
  • Leasehold tenure – These should now be long-term e.g. 120 or even 999 years. A lease extension can be very expensive so you certainly don’t want it to fall too far below 90 years.
  • Mortgage choice – Even if your share is low, you may still need a loan to finance it. Don’t assume every lender will be available for shared ownership schemes. Speak with an independent mortgage broker to discuss your options.
  • Managing agent – Your selling agent may not work in the same company as the freeholder’s managing agent. Find out as much as possible about your freeholder and their designated agent. e.g. is this scheme private or part of a social housing scheme? How do they deal with complaints and communal maintenance issues?
  • Guarantee on workmanship – A new build property usually has an initial repair guarantee period, but generally only from the year of completion. How many years are left on the guarantee, or is there none? New builds may look perfect but rarely are, and can come with disadvantages.
  • Sub-letting – Imagine what-ifs. What if you must move away for work and want to rent out your property? Beware of this as often, owning only part of a property bars you from legally renting it out.
  • Selling – There may come a day when you want to sell. What are the rules around selling up your share? You may discover that you don’t have the legal right to put it on the open market and can only sell it via the freeholder’s designated estate agent, which can limit buyers.

While shared ownership provides an excellent opportunity to get on the property ladder, the reality might not be as straightforward as it first appears. Always do your research, use the above to ask the right questions, and go in with your eyes open.

Edit: as of June 2025, a good BBC article has been published here. Housing Ombudsman data “Of the complaints made over the last five years, 44% were based in London”.

First-time buyer? Remember, it’s ‘caveat emptor’ — buyer beware. Read our blog to learn what to watch for during viewings

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