How does shared ownership work? It’s complicated…

In a 2026 report, the National Audit Office described shared ownership as: “a complex financial and legal product”.

Approach these FAQs as an introduction to some key issues, but do your own research and seek independent professional advice on anything you’re not sure about.

What is shared ownership? What is ‘part buy part rent’?

Shared ownership is often described as ‘part buy part rent’. Which sounds simple enough. Unfortunately, it’s a bit more complicated than it sounds. It’s a good idea to make sure you understand, and plan for, long-term financial costs and potential risks

“Shared owners are well informed about initial affordability, but the longer-term financial risks when buying their initial share may not be obvious.“

National Audit Office – Investigation into shared ownership (2026)

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Is SO a ‘realistic pathway to full ownership’?

Shared ownership is sometimes described as ‘a pathway to full ownership’. Of course, shared ownership works for some people. But many don’t staircase to 100%, and don’t sell on to full ownership in a subsequent property either. And, unfortunately, some find themselves trapped in a home they can’t afford and can’t sell.

What is ‘a foot on the property ladder’?

Shared ownership was introduced under a Conservative government, and their manifesto for the 1979 election promised: ‘We shall encourage mortgage shared purchase schemes which will enable people to buy a house or flat on mortgage, on the basis initially of a part-payment which they complete later when their incomes are high enough”. Which suggests shared ownership is about buying a home in instalments.

Marketing tends to place a lot of emphasis on staircasing (buying additional shares).

However, another interpretation of ‘a foot on the property ladder’ is buying a starter home with the intention of making a gain on sale to buy a home which is larger, in a better location, or otherwise preferable.

Housing markets create winners and losers

Why does it matter? Shared ownership – or ‘part buy, part rent’ – is pitched as the ‘affordable’ route into housing. The marketing of shared ownership homes sometimes implies that ALL buyers benefit from shared ownership as a ‘step onto the property ladder’. But this is over-simplistic. The wider housing market creates both winners and losers.

A rapidly rising property market will benefit buyers who buy a starter home as an investment generating a profit to help buy their next property. On the other hand, a rapidly rising property market will disadvantage buyers who interpret ‘a step onto the housing ladder’ as an opportunity to purchase their forever home in instalments. And vice versa.

It’s essential for home buyers to be clear what their intentions are, so that they can take appropriate advice and plan accordingly. For example, whether to budget for staircasing and lease extension.

Is shared ownership really cheaper than renting, or outright purchase?

Marketing often suggests that shared ownership is cheaper than other options. Whether this is true or not depends partly on the timescale. In the short-term, shared ownership is likely to be cheaper than renting privately or buying outright. But it’s important to think about longer term costs; for example, rent increases, staircasing, lease extension (if applicable), service charges and estate service charges (if applicable) and ground rent (if applicable).

Annual increases can result in rents rising faster than open market rents (which sometimes stay static or even go down). This can become problematic if shared owners find they can’t afford to staircase, and/or don’t want to (or can’t) sell. Selling on can also be difficult if monthly rent on un-purchased shares has risen to levels more expensive than other local properties.

Remember too that shared owners pay 100% of repair and maintenance costs regardless of the size of their share (perhaps as low as 10%).

A study by Savills found that:

‘At the end of a 25-year mortgage term… shared ownership becomes more expensive than full home ownership’.

How many shared owners staircase to 100%?

It’s surprisingly difficult to find out exactly how many shared owners staircase to 100%. One researcher, Dr Alison Wallace, told a meeting of the London Assembly Housing Committee in January 2020 that staircasing rates are low.

“The data is lacking to answer that question easily and has been for a long time, unfortunately, but all the evidence that has been attempted so far points to quite a low rate”.

A Parliamentary briefing (CBP-8828 Shared Ownership (England): the fourth tenure) came to a similar conclusion.

‘Existing data also suggests that it is currently fairly rare for shared owners to staircase to owning 100% of the equity in a property. [According to] data from housing associations about equity-sharing schemes including shared ownership and others [around] 4,000 households staircased to 100% ownership in 2018/19, less than half of the number of households buying their initial stake in a home.“

One reason so few people manage to staircase is that house prices rise faster than wages. Even those who intended to staircase find themselves priced out.

100% staircasing: does it matter?

Does it matter if only a small minority of shared owners staircase to 100%? Well, yes, actually. Shared owners are not currently entitled to extend their lease under the statutory route. (Though that should change under ongoing legal reform).

Other disadvantages faced by shared owners, compared to households who’ve staircased to 100%, include restrictions on subletting and selling.

Lease extension: does it matter?

Properties start to go down in value – all things being equal – once there are fewer than 80 years left on the lease.

In the past, shared ownership homes were often sold with 99-year leases (until recent reforms under the ‘new model’ for shared ownership). Consequently, many people will cross the 80-year threshold before they’ve finished paying off their initial mortgage. Why does it matter? The fewer years left on the lease, the more expensive it is to extend that lease. And the fewer years that are left, the more reluctant lenders are to issue mortgages. So it can become difficult and/or costly to sell a shared ownership home.

This may all seem a long way in the future. But it’s worth considering if you’re planning to sell at some point or, say, to leave your home as inheritance, or to use it to fund health care in retirement.

Additional Resources

HomeOwners Alliance – Is shared ownership worth it? Pros, cons and expert advice (UK)

Shared Ownership Resources – SO Hub: shared owner satisfaction

Shared Ownership Resources – SO Hub – Improving shared ownership