'Wildy unaffordable': The harsh reality of shared ownership

Shared ownership under strain

Shared ownership, a government-backed scheme designed to help people onto the housing ladder, is leaving some buyers facing sharply rising costs, disputes over repairs and difficulties selling their homes.

The model allows eligible buyers who cannot afford a full deposit and mortgage to purchase a portion of a property and pay rent on the rest, usually through a housing association. In England, it is the largest affordable home ownership scheme, with around 250,000 shared ownership homes.

But a report from the National Audit Office says the scheme’s complexity means buyers can be caught out by increasing service charges and may not fully understand the longer-term financial risks.

Rising charges and repair disputes

Twin brothers Riccardo and Simone Bertagna said they felt proud when they bought a 25% stake in a three-bedroom flat in Seven Sisters, north London, valued at £440,000. The arrangement involved a mortgage, rent on the remaining 75%, and a service charge of about £90 a month. They saw it as a stable investment and said it was £50 a month cheaper than renting.

They now say they feel trapped in an unsellable home after an external leak severely damaged the flat. They also reported a broken lift, dirty communal areas and no visible improvement to the building, while their monthly service charge has risen to just under £300. Their housing association said their concerns are being investigated and that shared ownership responsibilities are clearly set out before purchase.

Jamie Sugar, a single parent in north London, said shared ownership had proved far from affordable. She bought a 25% share of a three-bedroom flat for herself, her child and her disabled mother, but says service charges have risen to more than £8,000 a year, an increase of nearly 50% in under four years. From April, she faces monthly service charges of £683 on top of rent and mortgage payments, taking her housing costs to more than half of her net monthly income of about £2,998. Her housing association said it understood her concerns and would contact her to provide clarity on the charges.

Buyers left with little room to cope

The NAO said service charge increases can create affordability pressures over time. Although shared owners may own only a small share of a property, they are still responsible for paying 100% of the service charges as leaseholders. Those charges cover costs such as buildings insurance, exterior repairs and maintenance of communal spaces. There is no official cap, though charges are expected to be reasonable.

George Andain, who bought a 45% share of a £340,000 flat in central Brighton in 2021, said shared ownership was his only chance to buy. He said he and his family specifically asked about service charges and were reassured they were unlikely to rise drastically. The charge on his one-bedroom flat was initially around £120 a month.

Eighteen months later, he said he received a letter saying the monthly charge would jump to £327, a level he could not afford. In the same year, he was also billed more than £2,000 after the previous year’s service charge had been underestimated. His housing association said the service charge was set by a managing agent appointed by a freeholder, and that it had challenged increases and requested justifications.

The NAO said uncertain service charge increases pose the greatest risk to households whose affordability assessments leave them with limited financial headroom. Sir Geoffrey Clifton-Brown, chair of the Committee of Public Accounts, said it was “wholly unsatisfactory” that people who bought through shared ownership had been faced with cost pressures and complexity.

Barriers to staircasing and selling

The report also examined obstacles to “staircasing”, where owners buy a larger share of their home. It found that each step requires not only funding the extra equity purchase but also paying for a RICS valuation, legal fees and a landlord administration fee. Rising service charges can also reduce the money available to buy a larger share.

Some shared owners told the BBC that high service charges mean mortgage lenders will not lend to them, leaving them stuck with their original share and unable to sell. That is the situation Andain says he now faces. He said he feels trapped and worries that if he wants to start a family, he could remain in a one-bedroom flat without a resolution.

Patrick Duffy and his NHS-worker partner Lewis were able to staircase from a 40% share to a 60% share of their east London flat, but described the process as messy and complicated. They pay rent on the remaining 40%, hold two separate mortgages at different interest rates, and face a monthly service charge of £602. Duffy said the system is supposed to provide affordable housing, but has become “wildly unaffordable”.

Scheme still promoted despite concerns

Despite the problems described by some buyers, the NAO found shared ownership is forecast to be cheaper than private renting in 93% of areas in England over 10 years. The study suggests shared owners are on average £29,000 better off over that period, rising to £42,000 in London.

The Shared Owners’ Network said the NAO should go further and examine whether the scheme truly provides affordable homes, meets its policy goals and uses public funds effectively. The National Housing Federation and the government said shared ownership remains an important route onto the housing ladder, while acknowledging challenges for some buyers, particularly over rising service charges. They said work was under way to improve transparency and protections.

There were 20,353 shared ownership homes built using grant funding in 2024–25, the highest annual figure in the past decade and 11% of all new-build supply. More are planned as part of the government’s target to build 1.5 million homes, but the NAO said the government must make the scheme work better if it is to deliver genuinely affordable housing.