Help to Buy and Shared Ownership Mortgage Affordability in 2026

What Is Shared Ownership?

Shared ownership is a government-backed home purchase scheme available in England through housing associations. It allows you to buy a share of a property — typically between 10% and 75% — and pay rent on the remaining share owned by the housing association. You can buy additional shares over time through a process called staircasing, eventually owning outright.

Note: Help to Buy Equity Loan closed to new applicants in March 2023. This guide focuses on shared ownership, which remains active in 2026, and also touches on First Homes, the current government-backed scheme for first-time buyers in qualifying areas.

Use our [mortgage affordability calculator](/mortgage-calculator) to estimate the mortgage portion of a shared ownership purchase before approaching a housing association or lender.

How Affordability Works for Shared Ownership

Shared ownership affordability assessment is different from a standard mortgage application because you are assessed on two costs simultaneously:

1. **The mortgage** — a standard repayment or interest-only mortgage on the share you are buying

2. **The rent** — a below-market rent on the share you do not own (typically around 2.75% of the unsold share's value per year)

Both must be serviceable from your income, and lenders will assess both together. Your total monthly housing cost (mortgage + rent + service charge) must not exceed approximately 45% of your net income, though individual housing associations apply slightly different caps.

The Eligibility Criteria for Shared Ownership

To apply through a housing association in England, you must:

• Be a first-time buyer, OR have previously owned a home but no longer be in a position to buy outright (relationship breakdown, for example)
• Have a combined household income of **£80,000 or less per year** (£90,000 in London)
• Be unable to purchase a suitable home outright on the open market
• Meet the lender's standard credit and income requirements

These income caps mean that shared ownership targets lower to middle income earners in areas where property prices are high relative to local wages.

Calculating Affordability on Your Share

**Example:**

• Full property value: £280,000
• You wish to buy a 40% share: £112,000
• Mortgage needed (with 5% deposit of £5,600): £106,400
• Rent on remaining 60% (£168,000 at 2.75%): £4,620/year = **£385/month**
• Typical service charge on a new-build flat: £150–£250/month

Your monthly housing cost is therefore: mortgage repayment + £385 rent + service charge.

On a 4.5% mortgage rate over 25 years, a £106,400 mortgage costs approximately £584/month. Add £385 rent and £200 service charge: **total ~£1,169/month**.

For a single person earning £35,000 gross (~£2,750/month net), this represents 42% of net income — just within the 45% maximum threshold applied by many housing associations.

Mortgage Options for Shared Ownership

Not all lenders offer shared ownership mortgages. Those that do typically have specific shared ownership products with:

• A minimum purchase share (usually 10% or 25%)
• A requirement that the housing association accepts the lender's standard terms
• Specific leasehold requirements (minimum lease term remaining)

The LTV is calculated on the **share being purchased**, not the full property value. A 5% deposit on a 40% share represents a relatively small cash sum but a 95% LTV on the share itself.

**Key considerations:**

• Shared ownership mortgages typically have the same rate tiers as standard residential products based on the LTV of the share
• Lenders require the housing association to be on their approved panel — not all associations are accepted by all lenders
• The lease must usually have at least 85 years remaining at mortgage completion

Staircasing — Buying More of Your Home

Staircasing is the process of purchasing additional shares from the housing association, increasing your ownership over time. You can typically staircase in tranches of 10% or more.

**Affordability implications of staircasing:**

• Each time you staircase, you need a new mortgage (or to remortgage) on the increased share
• Your rent reduces proportionally as you own more
• Full ownership (100%) eliminates the rent entirely

From April 2021, new shared ownership leases in England follow the updated model, which allows staircasing in 1% increments annually (rather than 10% minimum), making the journey to full ownership more gradual.

First Homes Scheme

First Homes is a separate government initiative offering new-build homes to eligible first-time buyers at a discount of at least 30% below market value (some local authorities require 40% or 50%). The discount is preserved in perpetuity — when you sell, you pass on the same percentage discount to the next buyer.

Eligibility requires:

• First-time buyer status
• Household income under £80,000 (£90,000 in London)
• Purchasing a property at no more than £250,000 after discount (£420,000 in London)
• Local connection in many schemes

The mortgage affordability assessment for a First Homes purchase is broadly standard — the discounted purchase price is used as the basis for the mortgage application.

Tips for Strengthening a Shared Ownership Application

• **Save the maximum deposit you can** — even a 10% deposit on your share moves you out of the highest LTV band and reduces monthly payments
• **Assess total monthly housing cost honestly** — shared ownership is often presented as a cheaper route into homeownership, but service charges on new-builds can be significant and may increase annually
• **Plan for staircasing** — understand the likely valuations at future staircase points and model whether your income trajectory supports increased mortgage commitments
• **Use a specialist broker** — shared ownership mortgages are a niche product; a broker with shared ownership experience will know which lenders have the best appetite and best rates for this type of application

Use our [mortgage affordability calculator](/mortgage-calculator) to model the mortgage element of your shared ownership purchase and understand the overall monthly cost of your potential new home.