Help to Buy and Shared Ownership: UK Government Schemes Explained

What Are UK Government Homebuying Schemes?

For many first-time buyers in the UK, getting onto the property ladder feels out of reach. The government has introduced several schemes to help, with Help to Buy and Shared Ownership being the two most widely used.

Help to Buy: Equity Loan

The Help to Buy Equity Loan scheme allowed buyers to purchase a new-build home with just a 5% deposit. The government lent up to 20% of the property value (40% in London), meaning you only needed a 75% mortgage. The original scheme closed to new applicants in October 2022.

Repaying the Equity Loan

The equity loan is interest-free for the first five years. From year six, interest is charged at 1.75%, rising annually by CPI plus 2%. You repay the loan as a percentage of the property's current market value.

• You can repay in minimum 10% chunks of the property's current market value
• Full repayment is required when you sell or at the end of the mortgage term
• An independent valuation is required before each repayment

Shared Ownership Explained

Shared Ownership lets you buy a share of a home — typically between 10% and 75% — and pay subsidised rent on the remaining share owned by a housing association. Over time, you can buy more shares through staircasing, eventually owning 100% of the property.

Who Is Eligible?

To qualify for Shared Ownership in England, you must be a first-time buyer or previously owned a home but cannot afford to buy now. Household income must be £80,000 or less (£90,000 in London). You must be unable to buy suitable housing on the open market.

Costs to Consider

Shared Ownership comes with costs buyers often overlook. You pay both a mortgage on your share and rent on the housing association's share, plus service charges which can run to several hundred pounds per month on leasehold properties.

Key Differences Between the Two Schemes

Help to Buy was designed specifically for new-build homes, while Shared Ownership applies to both new-builds and resale properties. With Help to Buy, you owned 100% of the property from day one. Lenders such as Halifax, Nationwide, and HSBC all offer mortgages compatible with Shared Ownership. The FCA regulates mortgage advisers. MoneyHelper provides free, impartial guidance on both schemes.

Is Shared Ownership Right for You?

Shared Ownership works well if you have a steady income but cannot save a large enough deposit. However, if you plan to sell within a few years, costs of staircasing and legal fees can erode any gains. Speak to a whole-of-market mortgage broker and a solicitor experienced in shared ownership transactions before proceeding.