How Shared Ownership Costs Are Calculated

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Shared ownership is a government-backed scheme that lets you buy a share of a property (typically 10–75%) and pay subsidised rent on the portion you don’t own. The calculator shows your total monthly cost — mortgage payment on your share, rent to the housing association, and service charge — and compares it to renting privately and buying outright.

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The three monthly costs

As a shared owner, you pay three things each month:

1. Mortgage — on the share you purchased, minus your deposit. Calculated using the standard repayment amortization formula.
2. Rent — on the housing association’s (unowned) share, typically at 2.75% per annum of the unowned value. The legal cap is 3%.
3. Service charge — building maintenance, insurance, management fees, and sinking fund contributions. Varies by property.

Eligibility

Share sizes

Under the Affordable Homes Programme 2021–2026 (the “new model”), you can buy between 10% and 75% of the property. Older properties may have a minimum of 25%.

Deposit

Your deposit is calculated on your share, not the full property. Lenders typically require 5–10% of your share as a deposit. This means you need significantly less upfront capital than buying outright:

Rent on the unowned share

The housing association charges rent on the portion of the property they still own. The initial rate is capped at 3% per annum of the unowned value, though most charge 2.75%.

Annual rent increases follow one of two regimes:

Staircasing

You can buy additional shares over time (“staircasing”), eventually owning the property outright. Under the new model, you can buy as little as 1% per year for the first 15 years without needing a formal valuation. Larger purchases (5%+ increments) require a RICS valuation at current market value.

Affordability

The calculator flags affordability based on housing costs as a percentage of gross income:

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Where:

• Share value = property price × share percentage
• Unowned value = property price − share value
• Deposit = share value × deposit percentage
• Mortgage amount = share value − deposit

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Comparison with alternatives

Using the same example:

The outright purchase comparison assumes the same deposit percentage (10%) and mortgage rate. It includes the service charge in both scenarios since a leasehold buyer would also pay it.

คำอธิบายข้อมูลเข้า

• Property price — the full market value of the shared ownership property
• Share percentage — the share you’re buying (10–75%)
• Deposit percentage — your deposit as a percentage of your share (not the full property)
• Mortgage rate — annual interest rate on the mortgage for your share
• Mortgage term — years over which you repay the mortgage
• Rent percentage — annual rent as a % of the unowned value (typically 2.75%, max 3%)
• Annual service charge — yearly maintenance, insurance, and management fees
• Household income — gross annual income (used for affordability assessment)
• Market rent — equivalent private rental for comparison

คำอธิบายผลลัพธ์

• Total monthly cost — mortgage + rent + service charge
• Monthly cost breakdown — visual split showing how much goes to each component
• Deposit and mortgage amounts — upfront capital needed and amount borrowed
• Saving vs renting — how much cheaper (or more expensive) shared ownership is compared to private renting
• Saving vs buying outright — monthly saving compared to purchasing the property at full price
• Affordability gauge — housing cost as a percentage of gross income, colour-coded
• Lifetime costs — total interest, total rent, and total service charges over the mortgage term

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• Rent is fixed. The calculator uses a constant rent rate over the full term. In reality, rent increases annually (CPI + 1% or RPI + 0.5%), so the actual lifetime rent cost will be higher.
• No staircasing. The calculator assumes you keep the same share for the entire term. In practice, many shared owners buy additional shares over time, which reduces rent but increases mortgage payments.
• No property growth. The calculator does not model property appreciation. If the property value increases, staircasing costs more (you buy at market value) but your equity grows.
• Service charge is constant. Real service charges increase over time and can be subject to large one-off increases for major works.
• The affordability threshold (45%) is a calculator heuristic, not an official lending criterion. Lenders use their own detailed affordability assessments.
• Stamp duty is not calculated. Shared owners can either pay stamp duty on the full property value upfront or on each staircasing transaction once they exceed 80% ownership.
• Rates shown are for England only. Scotland, Wales, and Northern Ireland have different schemes (e.g. New Supply Shared Equity in Scotland, Shared Ownership Cymru in Wales).

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