Shared ownership and the impossible dream

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Why most shared owners don’t and can’t staircase….

Richard Murphy (MRICS, RICS Registered Valuer) is a Director with RJC Surveyors (a Shared Ownership Resources sponsor). In this feature he explains why most shared owners don’t and can’t staircase.

What is shared ownership?

According to Which?:

Also known as ‘part buy, part rent’, shared ownership is a scheme that allows you to buy a share of a property and pay rent on the rest. It’s designed to help people with small deposits and lower incomes get on the property ladder. 

I prefer to describe it as follows:

A ‘shared ownership’ tenancy is where the rent paid by the tenant is reduced according to the percentage of equity paid for. If the shared owner pays 25% of the value of the flat, then the rent payable is set at 75% of the housing association rent.  This rent is initially calculated as 2.75-3.00% of the market value of the flat.  Options are available to reduce the rent by making further down-payments of the market value usually at additional 25% chunks up to 100%. At this point the rent is reduced to zero, in a process known as staircasing.

It certainly helps people get on the ladder, but once on the ladder can they ever get to the next rung?

Very few shared owners manage to achieve 100% ownership. Unofficial figures suggest only 5-8%, but housing associations (HAs) have been reluctant to release these figures.

By doing some analysis on current price and making similar projections over the next 15 years, it is quite easy to see why this is the case. And it’s unlikely to change in the future – unless there is a radical change to the rules in this sector.

My analysis is based upon a new scheme in Walthamstow known as Feature 17 where 2 bed flats are currently selling for £500,000 and the service charge is £1,800pa. I have assumed the purchaser is a bus driver with a salary of £31,594 (the man on the Clapham Omnibus!) who would be eligible to buy a 25% share.

Renting v shared ownership

Flats on an earlier part of the scheme are currently renting at £1,400pcm i.e. £16,800 p.a. (This represents approximately 70% of the bus driver’s net income).

Assuming the HA charges 3% of the market value for their rent and the mortgage rate is 3% for the 25% share, the HA rent/mortgage payment (interest only) would be £15,000 p.a.

The total cost of rent plus service charge (assumed at £1,800 p.a.), would be £16,800 p.a.

This shows that cost of renting is about the same as buying into a shared ownership flat. There is no real subsidy. The bus driver would certainly be no better off than if he stayed purely renting (if he opted for a repayment mortgage, he would be approx. £3,300 worse off initially).

He would also not be required to make a long-term commitment to a property where the repairs and maintenance costs are unknown, but the lease would require him to pay.

That situation is unlikely to improve over time, as the rent increases by RPI plus 0.5% and yet public sector salaries are being limited to 1% currently. This will make it difficult to save for an additional share.

Projection – 15 years’ time

If we then project forward using the trends over the last 15 years (public sector pay only increased by an average of 2.4% per year over the last 15 years), the bus driver’s income would increase to £45,000. During the last 15 years, the House Price Index for Waltham Forest went up by 212% so projecting that forward the new price of our example would be £1,060,000.

A 25% share of this property would be worth £265,000. If this were added to the existing mortgage of £125,000, the total mortgage would be £390,000 representing 8.6 times his projected salary. This would be deemed to be unaffordable.

Therefore, if trends continue as they have over the last 15 years, it is unlikely that the bus driver would ever be able to afford to pay an additional 25%, never mind 75%!

Hopefully, this is a graphic example of why staircasing has not been successful for ‘shared owners’. The figures are only illustrative and would vary for each scheme and in different parts of the country. However, it probably summarises the situation in most London Boroughs.

For HAs on the other hand, their asset has increased in value from £375,000 to £795,000 at no cost to themselves apart from borrowing at the risk free rate, currently 0.05% see SONIA.


It is recognised that the Government are planning to introduce a cap on service charges for new build schemes for the 1st 10 years, which is a step in the right direction. Jenrick unveils huge £12 billion boost for affordable homes – GOV.UK (

Going forward if shared owners were only charged maintenance and repairs in direct proportion to their equity, the shared owner could use the savings to put towards an additional share. This would help to allow shared owners to get to that 2nd rung of the housing ladder.

This only duplicates what happens in the market currently. Renters do not generally pay service charge in addition to the rent they pay to the landlord on the usual Assured Shorthold Tenancies (ASTs). The rent includes most if not all these charges.  Why should shared owners pay for maintenance and repairs for the equity share that they do not own?

If they didn’t have to this would also be more equitable, and it would encourage HAs to build more carefully and take more responsibility for the defects in their buildings – particularly fire safety and cladding.

Richard Murphy, Director of Enfranchisement, RJC Surveyors


Phone: 020 7499 8043

I would be interested to hear any other views on this subject. Please do join the discussion via Leave a Reply at the end of this article.

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  1. Jane Livock
    June 5, 2021

    My service charge is in excess of £300 per month. I only own a 30% share.
    We don’t have a gym or concierge nor a garden to maintain.
    Based on my service charge alone as a 1 bedroom flat, with 130 properties in the building the freeholder “Printing House Square LTD” my leasholder “Thames Valley Housing” and managing agent “Pinnacle” are making in excess of £500,000 per year (and that’s based on my service charge.)
    This is criminal and corrupt. This needs to change.

    • Sue
      June 10, 2021

      Thanks for your comment Jane. Your flat doesn’t sound very ‘affordable’….. Especially given you only have a 30% share.

  2. Faye
    July 28, 2021

    This is a very difficult objective to ever achieve. I purchased 50% share of a property 26 years ago, inflation on the property has been ongoing ever since. Hence the remaining 50% share that I have paid rent on has increased by way of rent, service charge and now worth over 5.times more than had I been able to purchase it from the onset. I have just come to the end of the term of my original mortgage but now not able to buy the remaining 50% outright due to the price, I could now staircase but the cost of the remaining housing association’s shares and the rent still for the parts I am still unable to afford would force me way above my affordability. Why can’t the right to buy scheme be available to tenants in this situation that have paid for a percentage of their property but are now outpriced on being able to afford to buy the remaining share?

    The housing associations have more than been paid for the original price of the property, firstly by the 50% share being sold and through the rent paid on the remaining share over periods of time. I feel disheartened by the never ending battle to completely own my home.

  3. jessica
    September 13, 2023

    My friend in council/HA rented accommodation.
    She decided to take the right to buy some 20 years on. She has a health condition and has rarely ever paid her own rent. So she has been on benefits most of her life.
    So she gets her long term discount and a grant to help her. She walks away with a £175,000 flat for £35,000.
    Why are not of these schemes available for us? I’ve just learned that I have no better status than her, an assured tenancy. I’ve always paid from my own pocket, plus the care of the property over 25 years. Oh, she’s had new kitchens and bathrooms FOC over the years.
    She gets to walk away with all of that just for living there.
    Doesn’t seem fair.
    There are no help or schemes or grants for us, nothing.
    Oh and of course, staircasing became ever more unaffordable as the house prices soared

    • Sue
      September 13, 2023

      People with health needs should get the financial/housing support they need, so it’s good to hear that appears to be the case for your friend. My view is that everyone should have decent, secure, affordable housing. But that’s certainly not the case. Some people got badly stung by the right to buy scheme. And some people are finding that shared ownership isn’t as secure or as affordable as they imagined.

      I’m sorry to hear that’s the case for you and that staircasing has become unaffordable. You’re not the only person to experience this problem!

      A cross-party group of MPs are currently conducting an inquiry into whether shared ownership is affordable, value for money and a pathway to full home ownership. You might want to tell them about your own experiences. (You don’t have to answer all the questions, only the ones that are relevant to you.) The link is below, and the deadline is Thursday 14th September.

  4. jessica
    September 15, 2023

    My point is she has a better status and didn’t “buy” anything. Why are there no discounts for us? It doesn’t make any sense. I was 20 when I bought in to this. So I could rent for 60 years and gain nothing but being a cash cow for them.

  5. jessica
    September 15, 2023

    Only just seen your post as didn’t receive a notification. So I’ve missed that.
    I noted that when the gov bought in the satisfaction re shared owners. Suddenly I stop receiving any form of participation. I believe they are cherry picking the 1000 leaseholders.
    Their magazine never has any comments from long term people, only those that have just stepped in to their white elephant and are currently still in the honeymoon period.
    This needs to change.
    I believe we should have the same rights and benefits as any other assured tenant. The right to buy at discount being a major part of that.
    That we can sublet for agreed periods at market rent, as any other owner can.
    We have been conned and shafted.
    I’ve had enough paring for other lives.
    Yes, it’s great she was looked after while renting. But no I feel what she got it so unfair. I’ve always paid my rent up until this last year.
    25 years….add up the rent…. I can’t, it’ll anger me further….

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