How Share Owners Make Money in Shared Ownership Homes
May, 10 2025
Shared ownership homes can sound confusing at first, but there's a good reason they're getting popular—especially if buying a whole house feels way out of reach. But here’s the real question: can you actually make decent money this way, or is it just a tricky way of renting?
It all comes down to how the system works. You buy a chunk of the property—sometimes as little as 25%—and pay rent on the rest. The bit you own can go up in value just like a whole house would, so when prices rise, your share’s worth more too. But there’s more to the story.
Some folks wonder if you’re just handing over cash to a landlord forever. Actually, if you play your cards right, you can build equity, ride out a hot market, and pocket a surprising profit—plus, you’ve got an easier entry into the property ladder. It’s not a ‘get rich quick’ move, but for plenty of people, it’s a smart step up from pure renting.
- What Is Shared Ownership?
- How Do Share Owners Make Money?
- Capital Growth: The Big Earner
- Staircasing: Growing Your Share
- Selling Your Share: Tips and Pitfalls
- Hidden Costs and Smart Moves
What Is Shared Ownership?
Shared ownership is a way to buy a home without needing a gigantic deposit or massive mortgage upfront. It’s designed mainly for people who can’t quite afford to buy outright, but don’t want to rent forever. Instead of buying the whole house, you buy just a slice—anywhere from 10% to 75%, depending on what you can afford and what the housing association offers. The rest stays with a housing group or association, and you pay them rent for their chunk.
The catch? You still get to live in the whole place, not just your share. The bigger your share, the less you pay in rent. If you save up more money later, you can buy more of the home—this is called ‘staircasing’. Not all properties or areas offer shared ownership, but more than 200,000 families across England use it right now. If you’re under a certain income (usually under £80,000 a year outside London, £90,000 in London), you can usually apply.
Here’s a quick breakdown of how shared ownership stacks up in numbers:
| Feature | Shared Ownership | Traditional Ownership |
|---|---|---|
| Minimum Deposit | Often as low as 5-10% of your share | Usually 5-10% of total price |
| Home Ownership (%) | 10%-75% to start | 100% |
| Rent On Remaining Share? | Yes (to housing association) | No |
| Typical Income Limit (England) | £80,000-£90,000 | No limit |
The shared ownership model helps thousands of first-time buyers each year, especially when property prices just keep creeping up. For many, it’s a lifeline onto the property ladder—just with a few more rules and steps than buying the lot.
How Do Share Owners Make Money?
It’s easy to think owning just part of a home means smaller profits, but that’s not always the case. Share owners actually have several ways to see real returns, especially if they’re smart about timing and upgrades.
There are three main ways share owners put cash in their pocket:
- Capital growth: When property values rise, the part you own gets more valuable. If you own 40% and the home’s price jumps by £20,000, your chunk would now be worth £8,000 more than before. You keep the increase when you sell your share.
- Staircasing: You can buy more of your home over time. Each time you buy a bigger share (say, moving from 40% to 60%), you get more out of rising prices. Some people end up owning their home fully, which opens the door to selling at full market value.
- Renovation and improvements: Boosting the property’s value (think kitchen upgrades or a new bathroom) can mean your share grows in worth, too. Just keep in mind, some improvements might need the housing association’s sign-off.
Here’s a quick snapshot showing how cash-out might look for typical share owners:
| Original Share Owned | Property Purchase Price | Share Value at Purchase | Value After 5 Years (10% Growth) | Profit If Sold |
|---|---|---|---|---|
| 25% | £200,000 | £50,000 | £55,000 | £5,000 (+ any equity built from repayments) |
| 50% | £200,000 | £100,000 | £110,000 | £10,000 (+ equity) |
This isn’t just theory. According to official stats in 2024, the average shared ownership home rose 9% in value over five years—even with the housing market moving slowly in some places. And unlike renting, a portion of every mortgage payment chips away at what you owe—so your equity slowly climbs, too.
The smart play? Look out for areas where prices are set to rise and keep an eye on service charges, since those can eat into your profit if you’re not careful. And remember, you don’t have to staircase all the way up to 100% to see a payoff—you just need the right plan for your goals.
Capital Growth: The Big Earner
This is where shared ownership starts to shine. When house prices go up, so does the value of your slice of the home. You might only own 30%, but if the whole place goes up in value by £20,000, your bit just got more valuable too. It’s simple: the bigger the housing market grows, the more potential you have to make money on your share.
People often forget that the property market in England has had a pretty solid run—on average, house prices increased by just over 70% from 2013 to 2023. Not every year is a winner, but over time, most folks have watched their home value rise, and shared ownership shares follow the same pattern.
| Year | Average Price (£) | Annual % Change |
|---|---|---|
| 2013 | £174,000 | - |
| 2018 | £231,000 | +32.8% |
| 2023 | £297,000 | +28.6% |
Here's how it works in practice. You bought a 25% share of a flat worth £200,000, so your portion is £50,000. Five years later, the home is valued at £260,000. Your share? Now worth £65,000. That’s a £15,000 boost just for holding onto your stake while prices climbed.
Keep in mind, though, that if property prices drop, your share drops in value too. Market dips do happen. But in the long run, as the numbers show, bricks-and-mortar can be a solid bet for building up that initial investment—especially when getting onto the ladder any other way is nearly impossible.
A tip: always compare growth in your local area, not just the national average. Some neighbourhoods see homes double in value, while others move slowly. Check recent sales before you buy your share, so you know what to expect and plan your next steps smartly.
Staircasing: Growing Your Share
So, you’ve got your foot in the door with shared ownership—now what? If you want more control and bigger profits, 'staircasing' is your secret weapon. Staircasing just means buying a bigger slice of your home over time. When you can afford it, you increase your share in chunks, usually in 10% steps, until you own as much as 100% in some cases.
Here’s how it plays out: you contact your housing association when you’re ready to buy a bigger share. They’ll get the place valued at its current market price (not what you paid originally). You pay for that chunk based on today’s value. Say you own 25%, want to boost it to 50%, and the home’s value has gone up. You’ll pay more for the extra 25% than you did for the first bit—but when the property price rises, so does the worth of your owned part.
This is where the money angle comes in. The more you staircase, the more you benefit if house prices jump. Plus, as your share goes up, your rent on the remaining piece goes down—sometimes dropping by half or more. If you eventually own the full place, you stop paying rent altogether, just like anyone with a typical home.
- You usually need to cover the legal fees and valuation costs with each staircasing step.
- Most housing associations now let you staircase all the way up to 100% (but double-check before you buy—a few older leases have limits).
- If your property’s value drops, you actually pay less for the new share—so it cuts both ways.
The big tip? Plan staircasing for times when prices dip or you get a pay rise. Don’t forget to budget for the extras—fees can add up, but growing your share is how most people actually build real value in a shared ownership home.
Selling Your Share: Tips and Pitfalls
Thinking about selling your part of a shared ownership home? It’s not as simple as putting it on a big property website like you'd do with a whole house. The process is different, and honestly, there are a few hoops you have to jump through.
First off, most housing associations have first dibs on selling your share. That means before you look for your own buyer, the association gets a set number of weeks—usually 8 to 12—to find a buyer from their waiting list. Only if they can’t, are you free to open it up to everyone else.
One thing loads of people forget is the value you can actually get. The price of your share gets worked out by an official property valuation—not just whatever you want to ask for. And you pay for this valuation, which usually runs between £150 and £300. And don’t forget, you'll also cover legal fees and possibly a percentage of marketing costs. Here’s a quick look at common costs:
| Cost Type | Typical Amount (GBP) |
|---|---|
| RICS property valuation | £150–£300 |
| Housing Association fee | £150–£500 |
| Legal fees | £500–£1,000 |
| Marketing costs (if any) | £0–£1,000 |
There’s a big catch: shared ownership homes don’t always shoot up in value as quickly as others. Why? Because only people who meet certain criteria (like income limits) can buy them, so the pool of buyers is smaller. Sometimes, it can take a while to sell, especially if your local market is slow.
“People looking to sell their shared ownership property often underestimate how long it can take—the pool of buyers is smaller and there are extra admin steps compared to standard sales,” says Ellen Cross of the HomeOwners Alliance.
Here are a few tips if you want to make selling smoother and boost your odds of a good deal:
- Get your home looking its best for the valuation—a little tidying can push the number up.
- Check with your housing association if there's a list of people waiting to buy shares in your development.
- Read through the terms of your shared ownership lease about reselling—each one is slightly different.
- Ask upfront for a breakdown of every possible fee—no one likes surprise charges.
- If the association can’t find a buyer, list your share on big sites like Rightmove and Zoopla to reach a bigger crowd.
When it comes down to shared ownership properties, selling requires more paperwork, patience, and planning compared to traditional homes. Those who do their homework and stay in the loop with their housing association usually have a much smoother ride.
Hidden Costs and Smart Moves
Everyone looks at the price tag on the share they’re buying, but a lot of people forget the other bills that sneak in afterward. Shared ownership isn’t just about paying a mortgage on your share and rent on the rest. There are service charges, repairs, and weird little admin fees that pop up when you least expect them. No one wants a nasty surprise that eats into their gains.
Let’s nail down the main hidden costs:
- Service charges – Every building with shared ownership comes with these. They usually cover things like cleaning communal areas, fixing the roof, and shared insurance. These can jump each year, and you can’t control them.
- Rent increases – The rent you pay on the unowned share often goes up yearly, based on inflation or a set formula in your lease. It’s common for rent to climb more than your own income does.
- Maintenance and repairs – Even if you only own half the flat, you’ll typically cover 100% of repairs inside your property, and sometimes even parts of the building if your lease says so. You might get hit with big bills for communal repairs, especially in newer builds with lots of shared facilities.
- Admin fees – Want to sell your share or staircase up? The housing provider may charge you for valuations, legal checks, or just for handling forms. Some fees feel pretty steep for what you get.
So how do you stay smart and protect your shared ownership profits?
- Check the annual statement – Your housing provider should give you a detailed yearly statement of service charges. Go over it closely and question anything that looks weird or padded.
- Ask about rent review timings – Before you buy, find out exactly how and when your rent is reviewed. Some find hikes bigger than expected after only a year or two.
- Make a repairs fund – Stash away a little each month into a repairs pot. It’s dull, but it dodges panic when a bill lands for a broken boiler or a roof leak.
- Understand your staircasing rules – The process sounds simple, but the fees can add up each time you buy a bigger share. Work out if it’s cheaper to jump straight to a bigger share later, rather than tiny steps with lots of small charges.
- Watch for resale restrictions – Some shared ownership properties can only be sold back to the housing association or to people on a waiting list, limiting your profit. Always check for this in your lease.
Knowledge is power here. The best wins in shared ownership happen when you know the rules and read all the small print. If the numbers don’t make sense upfront or in the long run, don’t be afraid to walk away. Shared ownership can be a smart move, but only if you keep both eyes wide open.