Glossary · UK
What is Shared Ownership?
A scheme where you buy 25–75% of a home and pay subsidised rent on the rest.
Full Definition
Shared Ownership is a UK part-rent / part-buy scheme run by housing associations. You buy a share of the property (typically 25%, 50% or 75%) and pay subsidised rent (usually ~2.75%/year) to the housing association on the unowned share. Over time you can "staircase" up — buy more shares — until you own 100% (though leasehold restrictions usually remain). Available to first-time buyers, those who used to own but can no longer afford, or current shared owners moving home. Household income usually capped at £80,000 (£90,000 in London). Stamp duty applies on the share you buy or, optionally, on the total value.
How Shared Ownership is calculated
Purchase price = Property value x Share % / 100
Annual rent = (Property value - Purchase price) x Rent rate %- Property value
- Full open-market valuation set by the housing association.
- Share %
- Percentage of the property being purchased (typically 25-75%).
- Rent rate %
- Annual rent charged on the unsold share, typically 2-3% of its value.
Worked example: On a GBP 300,000 property with a 40% share purchased, the purchase price is GBP 120,000. Rent is charged on the remaining GBP 180,000 at, say, 2.75%, giving annual rent of GBP 4,950 (GBP 412.50/month), on top of the mortgage on the GBP 120,000 share and any service charge.