Getting onto the property ladder can feel out of reach when house prices are high and deposits are hard to save. Government-backed schemes have long aimed to bridge that gap, and two of the best known are shared ownership and Help to Buy. Comparing shared ownership vs Help to Buy helps you understand which route, if either, could suit your circumstances. This guide explains how each works, the pros and cons, and who each option tends to suit.
An important note on availability: government housing schemes change over time. The Help to Buy Equity Loan scheme for new-build homes in England closed to new applications, and the details of shared ownership vary by region and provider. Always confirm what is currently available in your area before making plans, and treat the descriptions here as a general guide.
How shared ownership works
Shared ownership lets you buy a share of a property — typically between 25% and 75% — and pay rent to a housing association on the remaining share you do not own. You take out a mortgage on the share you buy, so you need a deposit only on that portion, not the full property value.
Over time, you can usually buy further shares in a process called staircasing, gradually increasing your ownership until, in many cases, you own the property outright.
Key features:
- You need a mortgage and deposit only on the share you buy
- You pay rent on the remaining share, plus any service charge
- You can often staircase to increase your ownership later
- Properties are usually leasehold
How Help to Buy worked
The Help to Buy Equity Loan scheme in England allowed buyers of new-build homes to borrow a percentage of the property value from the government, interest-free for the first five years. Buyers put down a deposit, typically 5%, took out a mortgage for the remainder, and repaid the equity loan when they sold or remortgaged.
Because this scheme has closed to new applicants in England, it is included here mainly for comparison and for readers researching how it worked. Similar schemes have operated in other parts of the UK on their own terms, and new initiatives may be introduced over time, so it is always worth checking what is currently on offer.
Shared ownership vs Help to Buy: the key differences
| Feature | Shared ownership | Help to Buy (equity loan) |
| --- | --- | --- |
| What you buy | A share of the property | The whole property |
| Ongoing payments | Mortgage plus rent on the unowned share | Mortgage only (loan interest from year six) |
| Deposit basis | Based on the share you buy | Based on the full property price |
| Property type | New-build and resale | New-build only |
| Increasing ownership | Staircasing | Not applicable |
Pros and cons
Shared ownership
Pros:
- Lower deposit and mortgage, because they are based only on your share
- A realistic route in high-value areas
- Ability to staircase toward full ownership over time
Cons:
- You pay rent as well as a mortgage
- Service charges and maintenance costs apply, often for the whole property
- As a leasehold property, there are lease terms to consider
- Selling can be more involved than a standard sale
Help to Buy (where available)
Pros:
- You own 100% of the property from day one
- Only a small deposit needed
- The equity loan was interest-free for an initial period
Cons:
- Limited to new-build homes, which can carry a price premium
- The loan is repaid as a percentage of the property's value, so if the home rises in value, you repay more than you borrowed
- Interest becomes payable after the initial period
Who does each option suit?
Shared ownership may suit you if:
- You have a smaller deposit and modest income
- You are buying in an expensive area where a full purchase is out of reach
- You are comfortable paying rent alongside a mortgage and want to build ownership gradually
A Help to Buy-style scheme suited buyers who:
- Wanted to own their whole home from the outset
- Were happy to buy a new-build property
- Had a small deposit but could support a full mortgage
Eligibility for these schemes typically includes being a first-time buyer or not owning another property, meeting income caps, and buying within regional price limits. Because the rules differ and change, checking the current criteria is essential.
How Wisely can help
Choosing between shared ownership, a full purchase or any current government scheme is a significant decision, and the right answer depends entirely on your circumstances. As an independent, whole-of-market adviser, Wisely can explain the options available to you now, arrange the appropriate mortgage, and make sure you go in with a clear understanding of the costs.
Big decisions, made wisely. To explore your route onto the ladder with no obligation, book a free call on 023 8268 1111.
This guide is general information, not personal financial advice. Your home may be repossessed if you do not keep up repayments on your mortgage.
Frequently asked questions
Is shared ownership cheaper than buying outright?
The upfront cost is usually lower because your deposit and mortgage are based only on the share you buy. However, you also pay rent and service charges, so it is worth comparing the total monthly cost against a standard purchase before deciding.
Can I still use Help to Buy?
The Help to Buy Equity Loan scheme in England has closed to new applicants. Other schemes may be available depending on where and when you are buying, so check what is currently on offer in your region.
What is staircasing in shared ownership?
Staircasing is the process of buying additional shares in your shared ownership home over time. Doing so increases the portion you own and reduces the rent you pay, and in many cases you can eventually own the property outright.
Do I need a deposit for shared ownership?
Yes, but only on the share you are buying, not the full property value, which is why the deposit is often much smaller. For example, a 10% deposit on a 40% share of a £250,000 home would be based on £100,000, not the full price.