Buying a new home isn’t exactly a piece of cake, but there are loads of shortcuts that you can use to get there. For example, many first-time buyers are drawn to Shared Ownership, where you can buy a share of your home, pay a mortgage on the share you own, and rent the remainder of the property.

Shared Ownership is far more than renting with bells and whistles, but it can be difficult to decide what home-buying option suits your situation best. Wondering whether Shared Ownership is better than renting? Time to find out.

Is renting better than shared ownership?


More flexibility

If you prefer a spontaneous ‘pick up and go’ lifestyle, renting is a decision that will make more sense. While putting money towards owning a property will keep you bound to a home in a specific place, renting will enable you to move, live and travel as you please.

Good if you need something temporary and affordable

Renting is often a logical first step before buying a full property. Why? Because paying monthly rent is cheaper than buying a home outright, and makes for a convenient temporary option. As most rental properties come with short-term leases, you can easily move home if you are not a big fan of the location!

You don’t need to pay repair costs

Not owning your home comes with some hidden advantages. As you are renting someone else's property, this means that your landlord is responsible for paying for any fixes or repairs. That is, if you can convince them to make them!


Paying rent won’t get you closer to home ownership

You might be able to save some money on the side, but your monthly rent will not buy you any part of a property. Renting is sometimes seen as ‘dead money’ that helps you pay for living day to day, but doesn’t lead to permanent ownership. In other words, it’s not the best option if you want to own some of your own property, like the various Shared Ownership homes Peabody offer across London

You may have to pay a large deposit for the first month

Renting a home usually involves paying a hefty deposit of one month’s rent in advance - sometimes it can even be more! The government now has a scheme in place to protect your deposit, but there is a slim chance you could lose it if you get into a dispute with your landlord.

You are dependent on your landlord

Ever heard a horror story about a friend of a friend’s landlord? You’re not the only one. Renting a home means that your landlord is in control of rent increases, repairs, and even has the power to terminate your tenancy if circumstances change. If you are unlucky enough to get a bad landlord, life could get unpleasant!

Shared Ownership In Sydenham

Shared Ownership homes are launching Spring 2022 at Sydenham Groves, SE26.

Is shared ownership a good idea?


Easier than buying a home outright

If you want a little taste of full home ownership without paying through the nose, Shared Ownership is a much easier way to go about it. For starters, the initial deposit you pay for your share of the house is much smaller than what you would normally pay for full ownership. Many Shared Ownership owners noted that the monthly cost of Shared Ownership mortgage repayments were lower than the cost of rent!

You can buy even more shares in your property

Say your job changes or you suddenly win the lottery. With a Shared Ownership property, you can invest in even more shares towards your property - this is known as ‘staircasing’. This might not seem like the best thing in the world, but more shares in your property means that you pay less in rent! To find out more about staircasing, check out Peabody’s handy Staircasing guide!

Most shared ownership homes are brand new

Love the feeling of unwrapping new things? One of the biggest benefits of Shared Ownership homes is that they are usually new build properties with fresh fixtures and appliances, like our new development in Sydenham, which is launching this Spring. As well as saving you the trouble of paying towards repairs in the near future, you can decorate your new home as you wish, turning your new house into a place you can call home.


Most Shared Ownership homes are leasehold

As you don’t own the property, your right to live in a Shared Ownership home comes down to a lease. This means that, like with renting, you could be evicted if you fail to pay the rent or do something to endanger yourself or others. This means potentially losing the part of the home that you ‘bought’.

You may have to pay additional costs

Shared Ownership is a much more affordable route to owning your own home, but you also need to be aware of hidden costs! Shared Ownership means you have to pay service charge towards the upkeep of your home, and might even be liable to pay stamp duty if you aren’t a first-time buyer. As with buying any house, take account of these fees when it comes to budgeting.

You might be restricted on home improvements

While you can style the interior of a Shared Ownership home as you please, any wider home improvements will require the permission of your housing provider. This means that if you suddenly get the impulse to install a plush new loft space, you may need to hold yourself back!

Shared Ownership vs Private Renting - who comes out on top?

Deciding between Shared Ownership and renting will ultimately depend on what you need from your new home. If you are not yet ready to commit yourself to a permanent location, renting might be best. But if you want to secure your future in an area you love, Shared Ownership is an affordable route to owning your own home!


Want to learn more about the ins and outs of Shared Ownership? Peabody has a range of Shared Ownership homes in London, and you can learn everything about them here!

Find a home with Peabody

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