Both schemes help people with limited deposits get on the housing ladder — but they work in very different ways. Rent to Buy gives you time to save; Shared Ownership lets you buy a stake now and grow it over time. Here is how they compare across eligibility, monthly costs, long-term equity, and the path to full ownership.
| Feature | Rent to Buy | Shared Ownership |
|---|---|---|
| How it works | Rent at ~80% market rate; buy later | Buy 10–75% share; pay rent on rest |
| Who owns the property? | Housing association until you buy | You (your share) + housing association |
| Mortgage needed? | No (rent only during rental period) | Yes — from day one on your share |
| Deposit required? | Small deposit to rent (usually 1 month) | Typically 5–10% of your share value |
| Equity from day one? | No | Yes — on your share |
| Rent amount | ~80% of market rent | ~2.75% p.a. of unsold equity |
| Service charge? | Usually included or minimal | Yes — often £150–£350/month (flats) |
| Income limit | Varies by provider, typically £60–80k | £80,000 (£90,000 in London) |
| Property type | New-build only | New-build and resale ("staircasing") properties |
| Path to full ownership | Buy outright or via Shared Ownership after rental period | Staircase in increments up to 100% |
| Availability | Limited — specific housing associations | Wider — many registered providers |
| SDLT (stamp duty) | Paid when you buy | Pay on share only or market value election |
| Who suits it best | Those needing time to save a deposit | Those ready to buy but cannot afford full price |
Rent to Buy is a government-backed scheme (in England, administered through Homes England) that lets eligible renters live in a new-build home at approximately 80% of the local market rent for an intermediate rental period — typically up to five years. The 20% discount is specifically designed to help you save a deposit faster than you could while paying full rent elsewhere.
At the end of the rental period you have the option to purchase the property — either by buying it outright with a standard mortgage, or by purchasing a share through Shared Ownership. If neither option is suitable at that point, you generally must vacate so the property can be offered to another eligible household.
Suppose market rent for a property is £1,250/month. Rent to Buy charges approximately £1,000/month (80%). Over five years you save £15,000 in rent — money that can go directly into your deposit fund alongside any other savings. If you also save £300/month separately, your total deposit pot after five years is £15,000 + £18,000 = £33,000.
Shared Ownership (also called “part rent, part buy”) lets you purchase a share of a property — typically between 10% and 75% — and pay a subsidised rent on the remaining share to the housing association. Since 2021, the new model of Shared Ownership allows you to staircase in 1% increments, making it much easier to grow your stake over time.
You take out a mortgage on your share only, which means the deposit needed is a fraction of a standard purchase. For example, a 5% deposit on a 25% share of a £300,000 property is just £3,750 rather than £15,000+ for outright purchase.
| Cost component | Example (25% share, £300k property) |
|---|---|
| Purchase price of share | £75,000 (25% of £300,000) |
| Mortgage (5% deposit, 25yr, 4.5%) | ~£389/month |
| Rent on unsold 75% (2.75% p.a.) | £225,000 × 2.75% ÷ 12 = ~£516/month |
| Service charge (flat) | ~£200/month |
| Total monthly outgoings | ~£1,105/month |
| Market rent equivalent | ~£1,250/month |
| Monthly saving vs renting | ~£145/month + equity growth |
Figures illustrative. Rent percentage and service charge vary by provider and property. Use the mortgage repayment calculator for your own figures.
Staircasing is unique to Shared Ownership — it is the mechanism by which you buy additional shares in your home. Each time you staircase, you must commission a RICS valuation (typically £300–£500), and your rent falls proportionally as your share increases.
| Share owned | Monthly rent (£225k unsold equity at 2.75%) | Effect |
|---|---|---|
| 25% | £516 | Starting position |
| 50% | £344 | Rent reduces by £172/month |
| 75% | £172 | Rent reduces further |
| 100% | £0 | Full ownership — no more rent |
Note that when you staircase, you buy shares at the current market value, not the original purchase price. If property values rise, staircasing becomes more expensive. This is why some owners prefer to staircase quickly — the 1% annual increment option in the 2021 model (available on new Shared Ownership leases) helps by spreading the cost.
| Your situation | Better option |
|---|---|
| You have very little or no deposit saved | Rent to Buy (save first, buy later) |
| Your credit score needs work before a mortgage | Rent to Buy |
| You want equity growth from day one | Shared Ownership |
| You need to move in next 3–6 months and can afford a small mortgage | Shared Ownership |
| You are in a high-demand area with limited supply | Whichever is available — consider both |
| You want flexibility to move city in 2–3 years | Rent to Buy (no commitment to buy) |
| You want to own 100% long-term | Shared Ownership with aggressive staircasing |
| You cannot find Rent to Buy properties locally | Shared Ownership by default |