★ Shared ownership mortgage specialists ★ Low deposit options ★ First-time buyer support ★ Whole-of-market advice
Shared Ownership
Mortgages
Drummonds Finance Group
Shared ownership can help you buy a home with a smaller deposit. You buy a share of a home, from as little as 10%, and pay a reduced rent on the rest, so your deposit and mortgage are based only on the share you buy. We find shared ownership mortgages from lenders that understand the scheme for buyers across England.
At Drummonds Finance Group, we compare shared ownership mortgage options from across the market to find lenders that suit your income, deposit and the share of the property you’re looking to buy.
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Who is eligible for shared ownership?
In England you can usually apply if your household income is £80,000 or less, or £90,000 or less in London. You must be 18 or over, and you cannot own another home when you complete, unless you are selling it.
You do not have to be a first-time buyer, but you must not be able to afford a suitable home on the open market. Some homes give priority to local residents, people who work locally or members of the armed forces.
You also need the right to live in the UK. Many lenders accept applicants on visas or with pre-settled status, which we cover on our foreign national mortgages page.
Why Choose Drummonds for Shared Ownership
✅Whole-of-Market Access
We can compare remortgage options across a wide range of lenders, not just the bank you are already with.
✅We specialise in shared ownership mortgages
helping buyers understand how shared ownership works and which lenders may suit their circumstances.
✅Help with affordability
we look at your income, rent, service charges and the share you are buying to find suitable mortgage options.
✅One adviser throughout
clear, straightforward support from your initial enquiry through to mortgage offer.
Specialist Mortgages
Not every mortgage fits a lender's computer model. Much of our work at Drummonds Finance Group is with clients who have been turned down elsewhere or told their case is too complicated. We work with clients across the UK by phone and video, and we know which lenders will look at each situation properly.
What is a shared ownership mortgage?
Shared ownership is a government-backed scheme in England, run by housing associations and other registered providers. You buy a share of the property, usually between 10% and 75%, with a mortgage and deposit, and pay rent to the housing provider on the share you do not own.
A shared ownership mortgage is the loan for your share. Only certain lenders offer them, because the lender has to accept the housing provider's lease, and the affordability check includes your rent and service charge as well as the mortgage.
Scotland, Wales and Northern Ireland run their own shared equity and shared ownership schemes with different rules. Full details of the scheme in England are on GOV.UK.
How does shared ownership work?
As an example, take a home with a full market value of £300,000. You buy a 40% share, worth £120,000. With a 10% deposit of £12,000, your mortgage is £108,000. You then pay rent on the remaining 60% share, worth £180,000. At a typical rent of 2.75% a year, that is around £413 a month, plus any service charge. These figures are for illustration only.
Your rent usually rises once a year, often in line with inflation. As you buy more shares, your rent falls, and once you own 100% you stop paying rent altogether.
How much deposit do you need for shared ownership?
Most lenders want a deposit of 5% to 10% of the share you are buying, not the full value of the home. On a 25% share of a £300,000 home, a 5% deposit is £3,750.
The deposit can come from savings or, with most lenders, a gifted deposit from family. You will also need money for legal fees, the housing provider's fees and any stamp duty.
How do lenders assess shared ownership affordability?
There are two checks. The housing provider carries out its own affordability assessment to make sure the share you want is right for your income and savings, and may ask you to buy a bigger or smaller share.
The lender then checks you can afford the mortgage, rent and service charge together. Because the rent counts as a commitment, you may be able to borrow less than you expect, so it is worth getting a mortgage in principle before you reserve a home.
Can you get a shared ownership mortgage with bad credit?
Often, yes. Fewer lenders offer shared ownership mortgages than standard mortgages, so the choice is narrower, but some will accept missed payments, defaults or CCJs depending on how recent they are. Our first-time buyer bad credit page explains how lenders view different credit problems.
If you are self-employed or an NHS worker with overtime or bank shifts, we can find shared ownership lenders that use your full income.
What is staircasing and how does it work?
Staircasing means buying more shares in your home over time until you own it outright. Each time you staircase, the housing provider values the property, and you pay the current market value for the new share, not the original price. If your home has gone up in value, each new share costs more.
Under the newer model leases introduced in 2021, you can buy extra shares in steps as small as 1% a year for the first 15 years, at a low cost and without a full valuation. Older leases usually need a minimum of 10% at a time.
To pay for a larger share, you will usually need to borrow more, either from your current lender or by remortgaging to a new one. We arrange both and work out whether the rent you save outweighs the extra mortgage cost.
Are shared ownership homes leasehold?
Yes. Shared ownership homes are leasehold, and the housing provider owns the freehold until you own 100%. Newer leases on houses are usually 990 years, while flats and older leases are often 99 to 125 years. A short lease can limit which lenders will lend, so we check it before you commit.
With flats, you will usually pay a service charge for the upkeep of the building. Under the newer leases, the housing provider also helps with essential repair costs for the first 10 years on new-build homes.
You can usually decorate freely, but larger works such as extensions or structural changes need the housing provider's written permission.
How does stamp duty work on shared ownership?
You can choose to pay stamp duty on the share you buy now, with more due later if you staircase above 80%, or pay it on the full market value upfront in one go. First-time buyer relief can apply to either route, which often means paying little or nothing. The rules are set out on GOV.UK, and your solicitor will confirm the best option.
How do you sell a shared ownership home?
You can sell your share at any time. The housing provider usually has a nomination period to find a buyer from its own waiting list, and if it does not, you can sell on the open market. If you own 100%, you can sell like any other home.
The sale price is based on an independent valuation of the full property at the time, and you receive your share of it.
What are the pros and cons of shared ownership?
The main advantages are a smaller deposit, a smaller mortgage, often lower monthly costs than buying outright, and the chance to own more over time. Many shared ownership homes are new or nearly new.
The drawbacks are that you pay rent as well as a mortgage, the rent usually rises each year, you are responsible for repairs, and selling can take longer. Fewer lenders offer shared ownership mortgages, and staircasing gets more expensive if prices rise. We talk through all of this before you reserve a home.
How the shared ownership mortgage process works
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We check your eligibility, income, deposit and credit, and work out what share you can afford.
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We get a mortgage in principle from a lender that accepts shared ownership.
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You reserve your home and complete the housing provider's affordability assessment, which we help you prepare for.
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We submit the full mortgage application and manage the lender, the housing provider and your solicitor.
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After completion, we can help when you are ready to staircase or remortgage.
Shared ownership mortgage broker in Oxfordshire and across the UK
We are based in Wendlebury and help buyers with shared ownership homes in Oxford, Bicester, Banbury and across England. Appointments are by phone or video.
Frequently asked questions
Author
Written by Liam Drummond CII (MP), owner and named mortgage broker at Drummonds Finance Group. Member of the Personal Finance Society, the Society of Mortgage Professionals and the Chartered Insurance Institute.
On this page we have explained what a shared ownership mortgage is, how the scheme works and who is eligible. We have covered the deposit you need, how lenders and housing providers assess affordability, and your options with bad credit. We have also looked at staircasing, leases and repairs, stamp duty, selling your share, the pros and cons, and how we arrange your mortgage from start to finish.