The pros and cons of shared ownership

For many people, getting onto the property ladder feels just out of reach. House prices rise, deposit requirements feel steep, and mortgage affordability rules can make the whole process feel like a maze.  

If you’ve found it challenging to qualify for a standard mortgage – whether because of income, deposit size, or simply where you’re looking to buy – shared ownership can seem like a more manageable first step. 

But it’s not the perfect solution for everyone. Let’s look at how shared ownership works, what the pros and cons are, what credit score you need, and why keeping a close eye on your credit report is a key part of the journey. 

What is shared ownership? 

Shared ownership is a scheme designed to help people who may not be able to buy a home outright. You purchase a share of a property – usually between 10% and 75% – and pay rent on the share you don’t own to a housing association or similar provider. 

You’ll still need a mortgage for the portion you buy, but because that portion is smaller, the deposit and monthly mortgage payments are typically lower than if you bought the whole property upfront. 

Over time, you may be able to buy more of the property – a process known as staircasing – gradually increasing your ownership share when your circumstances allow. 

You don’t have to staircase if you don’t want to, but many people use shared ownership as a stepping stone towards owning 100% of their home. 

How does shared ownership work? 

Here’s the process in a nutshell: 

1. Apply for shared ownership eligibility

You’ll usually need to show that you can’t afford a suitable property on the open market, that your household income falls below certain thresholds, and that you’re a first-time buyer or in a similar qualifying category. 

2. Find a suitable property

Most shared ownership homes are new-builds or properties specifically allocated for the scheme. 

3. Apply for a mortgage 

Your mortgage will only cover your portion of the property. That means the deposit is based on your share, too. 

4. Pay rent on the remaining share

This rent is paid to the housing provider. Depending on the property, you may also pay service charges or ground rent. 

5. Optionally staircase later 

If your financial situation improves, you can buy more shares – sometimes in small increments, sometimes in larger ones – depending on the rules for the property. 

It may seem straightforward, but the details can make a big difference to whether it’s the right choice for you.  

The pros of shared ownership 

Shared ownership can be a lifeline for people who feel stuck between renting and full homeownership. Here are some of the biggest advantages. 

1. Lower upfront costs 

Because you’re only buying a share of the property, you’ll generally need a smaller deposit and a smaller mortgage. This makes the scheme accessible to people who have good affordability but limited savings. 

2. A foot on the housing ladder 

Shared ownership gives you the structure and stability of homeownership – including building equity – without needing to buy the whole property at once. 

3. Potential to staircase 

If your income grows, or you’re able to save more over time, you can increase your ownership share in stages. In some cases, you can eventually staircase to 100%. 

4. More security than renting 

Even though you’re paying rent on part of the property, you’re also a homeowner with a long lease. This may offer a greater sense of stability than the private rental market. 

5. Accessible to people who may not qualify for a full mortgage 

If strict affordability calculations are preventing you from buying outright, shared ownership can be a more realistic route – especially for those with moderate incomes, single-income households, or people recovering financially after a life event. 

The cons of shared ownership 

Shared ownership isn’t right for everyone, so it’s worth fully understanding the drawbacks before committing. 

1. You’ll have both rent and mortgage payments 

While the mortgage may be smaller, you’ll still pay rent on the share you don’t own. When rent, service charges, and potentially ground rent are all added together, the total can feel similar to renting privately. 

2. Service charges can be high 

Many shared ownership properties are flats in managed developments, where service charges can be significant. These charges can rise over time and are often out of your control. 

3. Staircasing can be expensive 

Buying additional shares involves valuations, legal fees, and sometimes admin charges. Even though it helps you build ownership gradually, the costs can add up. 

4. Selling your share can take longer 

When you decide to sell, the housing provider usually has ‘first refusal’ – meaning they get time to find their own buyer before you can put the property on the open market. This can slow the process down. 

5. Limited choice of lenders 

Not all mortgage lenders offer shared ownership products. This can mean fewer options and sometimes less flexibility compared with standard mortgage applications. 

What credit score do you need for shared ownership? 

Your credit score is just a representation of your credit health. There isn’t a single score that automatically qualifies you for shared ownership. Each lender sets its own criteria, and each of the UK’s credit reference agencies (CRAs) uses a different scoring system. It’s the information on your credit score that counts. 

Lenders will typically want to see: 

• A track record of paying bills, credit cards, and loans on time. 

• No recent defaults, CCJs, or missed payments. 

• Stability with your address and employment history. 

• Responsible management of any existing accounts. 

But if your credit history has been patchy – it doesn’t automatically rule you out. Some lenders specialise in working with applicants who have had difficulties in the past, and shared ownership may still be an option. 

Why checking your credit report matters 

Whether you’re applying for shared ownership or a standard mortgage, your credit report plays a big role in shaping your options. Your report is what lenders use to understand how you’ve managed credit in the past – and how risky it would be to lend to you now. Discrepancies, outdated information, and errors can all make mortgage applications more difficult. 

As we covered in our article on checking your credit report throughout your mortgage journey, keeping an eye on your information isn’t just a one-off task. As you get closer to applying – whether for a shared ownership mortgage or a staircasing loan – you want your report to be accurate, complete, and working in your favour. With Checkmyfile, you can: 

• See data from the UK’s three main CRAs – Experian, Equifax, and TransUnion – in one place. 

• Spot differences or mistakes that could affect your application. 

• Track your progress as you work on improving your credit health. 

• Get support in understanding what your report is showing and why it matters. 

This clarity can make the homebuying process feel more manageable – especially when you’re already navigating something as complex as shared ownership. 

Get started with a 30-day free trial. It’s then a paid monthly subscription you can cancel online anytime.  

Is shared ownership worth it? 

Shared ownership can be an excellent stepping stone, offering stability and a realistic route onto the property ladder. But it isn’t perfect, and it won’t suit everyone. The decision often comes down to your financial situation, long-term plans, and how comfortable you are with the ongoing costs involved. 

If you’re thinking about taking the next step – whether an initial shared ownership application or preparing to staircase – a good place to start is with your credit report. Understanding where you stand now can help you identify what’s going well, where there’s room for improvement, and how lenders might interpret your financial history.