Mortgages & Property

Shared Ownership vs Help to Buy UK — Which Is Better?

Comparing Shared Ownership and Help to Buy schemes. How each works, costs, pros and cons, and which suits your situation.

By PocketWise · · 4 min read

Mortgage information is general guidance only. Mortgages are regulated by the FCA. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Consult an FCA-regulated mortgage adviser before making decisions.

Both schemes help first-time buyers, but they work very differently.

Quick Comparison

Feature Shared Ownership Help to Buy (Equity Loan)*
How it works Buy share, rent rest Government loan
Still available Yes England: Closed March 2023
Deposit 5-10% of your share 5% of property
Monthly payments Mortgage + rent Mortgage + loan repayment later
Own eventually Staircase to 100% Full ownership from start

*Help to Buy Equity Loan closed to new applications in England March 2023. Different schemes exist in Wales/Scotland.

Shared Ownership Explained

How It Works

Step Details
Buy a share Usually 25-75%
Rent the rest From housing association
Deposit needed 5-10% of your share
Mortgage On your share only
Service charge Usually applies

Example Numbers

Property value £300,000
Your share (40%) £120,000
Deposit (10% of share) £12,000
Mortgage needed £108,000
Rent on remaining 60% ~£450/month
Mortgage payment (approx) ~£600/month
Total monthly ~£1,050

Staircasing

What Buying more shares
When Anytime after purchase
How Buy extra % at current value
Goal Eventually own 100%
Rent reduces As share increases
Costs Valuation, legal fees each time

Buying More Shares

Current Share Buy Extra New Share
40% 10% 50%
50% 25% 75%
75% 25% 100% (full owner)

Help to Buy Equity Loan (England — Now Closed)

How It Worked

Feature Details
Government loan 20% (40% in London)
Your deposit 5%
Mortgage 75% (55% in London)
Interest-free First 5 years
Then Interest charges apply
Repay When sell or end of mortgage

Key Point

Status Closed to new applications
England March 2023
Existing loans Continue as agreed
Alternatives See below

Wales and Scotland

Wales Help to Buy

Feature Details
Status Check gov.wales for current availability
How works Similar equity loan model
Eligibility New-build, price caps

Scotland

Schemes Status
First Home Fund Was available (check current status)
Other initiatives LIFT schemes
Check mygov.scot for current options

Alternatives Now Available

First Homes (England)

Feature Details
What Discount market sale
Discount 30-50% off market value
Eligibility First-time buyers
Price cap After discount
Restriction Discount stays with property

Lifetime ISA

Feature Details
Bonus 25% on up to £4,000/year
Max bonus £1,000/year
Must be Under 40 to open
For Property under £450,000

Mortgage Guarantee Scheme

Feature Details
What Government backs 95% mortgages
Benefit More lenders offer them
You provide 5% deposit
Normal mortgage Standard product

Shared Ownership: Pros and Cons

Advantages

Pro Details
Lower deposit 5-10% of share only
Smaller mortgage Easier to get
Get on ladder On lower income
Staircase option Buy more when can afford
Still available Application open

Disadvantages

Con Details
Pay rent + mortgage Never rent-free until 100%
Rent can increase Usually capped
Service charges Often apply
Selling restrictions Housing association rights
May be harder to sell Niche market
Can’t always improve Need permission
Leasehold usually Not freehold

Help to Buy: Pros and Cons (For Existing Users)

Advantages

Pro Details
Full ownership From day one
Interest-free period First 5 years
Only 5% deposit Government provided 20%+
Normal sale When selling

Disadvantages

Con Details
New-build only Often premium priced
Must repay loan % of future value
Interest starts year 6 Adds to costs
If value rises Repay more
Regional price caps Applied

Which Suits Your Situation?

Choose Shared Ownership If

Situation Why
Can’t save large deposit Lower entry point
Income below thresholds Still possible
Happy to staircase Long-term plan
Comfortable with rent Ongoing cost
Only option available Help to Buy closed

Alternatives to Consider

If Consider
Help to Buy no longer available First Homes, LISA
Want full ownership Save for 5%+ deposit
Prices too high Consider different area
Not sure about buying Rent and save

Costs Comparison

Upfront Costs

Cost Shared Ownership Standard Purchase
Deposit 5-10% of share 5-20% of property
Legal fees Yes Yes
Survey Yes Yes
Stamp Duty On your share (exemptions may apply) Standard

Ongoing Costs

Cost Shared Ownership Full Ownership
Mortgage On your share On full property
Rent On remaining share None
Service charge Usually Depends
Ground rent If leasehold If leasehold
Maintenance Usually in service charge Your responsibility

Summary: Shared Ownership Decision

Key Facts

Shared Ownership Details
Buy 25-75% share
Rent Remaining share
Deposit 5-10% of your share
Staircase To 100% over time
Restrictions Some apply

Is It Right For You?

Question Yes/No
Can you afford rent + mortgage?
Happy with potential restrictions?
Plan to staircase eventually?
Understand leasehold implications?
Comfortable with selling process?

Alternatives to Explore

Option Best For
First Homes Discount on new-build
Lifetime ISA Saving for deposit
Standard mortgage If can afford 5%+
Mortgage guarantee scheme 95% LTV
Rent longer and save Larger deposit

Key Resources

Resource For
ownyourhome.gov.uk Shared Ownership
gov.uk/first-homes First Homes
gov.uk/lifetime-isa LISA
Local housing associations Available properties

Help to Buy in England has ended, but Shared Ownership remains a genuine route to home ownership for those with limited deposits. Understand the ongoing costs and restrictions before committing. If Shared Ownership doesn’t suit you, explore the alternatives — there are still options for first-time buyers to get on the property ladder.

Your home may be repossessed if you do not keep up repayments on your mortgage. PocketWise provides information and guidance — we do not offer financial advice. Seek independent mortgage advice before making decisions about borrowing.

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Sources

  1. GOV.UK — Help to Buy
  2. GOV.UK — Shared ownership