Published 28 Jun 2019
Whats the difference between Shared Ownership and Help to Buy?
We've asked our friends at Share to Buy, the national property portal aimed at helping first time buyers get on the property ladder, to help explain the differences between Shared Ownership and Help to Buy:
First time buyers are feeling overwhelmingly priced out of the property market, especially in the capital, with many prospective purchasers turning to alternative home buying options such as Shared Ownership and Help to Buy London to assist them onto the housing ladder.
While these schemes are more popular than ever, we at Share to Buy, the UK’s leading affordable home ownership property portal, are still inundated with questions over which route budding buyers should take. So, to help you on your home buying journey, we’ve outlined all of the key differences between Shared Ownership and Help to Buy!

What does the scheme offer?
Shared Ownership
Shared Ownership – often referred to as part buy/part rent – allows purchasers to buy a share in a home. Buyers will pay a mortgage on the share that they own, usually between 25% and 75%, and rent on the remainder to a housing association such as Peabody.
Help to Buy
Help to Buy is a government-backed scheme which allows buyers to purchase a new build home with the help of an equity loan – also known as shared equity.
If you’re buying in London, the government provides a loan of up to 40% of the home, so you only need to raise a 5% deposit with a 55% mortgage making up the rest. Outside of London, the loan is up to 20% with a 5% deposit and a 75% mortgage.
Am I eligible for Shared Ownership or Help to Buy?
Shared Ownership
Shared Ownership is available to first time buyers, and those who are in the process of selling or have previously owned a home but have since sold.
To be eligible to buy through the Shared Ownership scheme, your maximum household income must not exceed £90,000 in London, or £80,000 per annum across the rest of the UK. Any buyer would also need to be at least 18 years old and otherwise unable to buy a home on the open market.
Use our quick Shared Ownership Eligibility checker tool to see if you qualify.
Help to Buy
The Help to Buy equity loan is available to first time buyers, those who have previously sold a home, or those who will have sold their current property before or at the point of completion on their Help to Buy home.
Buyers must be at least 18 years old and unable to buy on the open market, however, unlike Shared Ownership, there is no maximum income cap for this scheme.
What kind of home can I buy?
Shared Ownership
Shared Ownership is mostly available on purpose-built homes, including new build properties which are often part of larger developments in an area. However, resale properties are also available where you buy a home from the current shared owner.
Help to Buy
The Help to Buy equity loan is only available on specified new build homes, and you cannot buy a property that is on the market for more than £600,000.
How does the deposit work?
Shared Ownership
One of the main benefits of buying through Shared Ownership is the deposit, as you only need to raise 5% of the share that you are buying, not on the full value of the property. For example, if you’re buying a 25% share of a home that’s worth £450,000 – equating to £112,500 – then your 5% deposit would be just £5,625!
Help to Buy
If buying a home through the Help to Buy scheme, you would need to raise a deposit of 5% of the full value of the home. This means that if you’re buying a property worth £450,000, your deposit would be £22,500. However, as the equity loan counts towards your deposit, this means that you may be able to take out a mortgage where you might otherwise struggle!
What are the repayments like?
Shared Ownership
Once you’ve purchased your Shared Ownership home, you will be paying a mortgage on the share you own, and a subsidised rent on the remainder to your housing association, along with any service charges and ground rent.
If you decide to buy more shares in your home through a process known as ‘staircasing’, your monthly mortgage payments will increase while your rent will decrease. In most instances, you can go on to buy 100% of your home property and, at this time, you will only pay your mortgage.
Help to Buy
The Help to Buy equity loan is interest free for five years – during this time, you will only be required to make your mortgage payments and a monthly management fee of just £1. After the initial five years comes to an end, you will go on to pay an annual fee of 1.75% on the amount of the outstanding loan, however this amount is not fixed and will fluctuate with the value of your home.
How do I sell my home?
Shared Ownership
If you wish to sell your Shared Ownership home, you can choose to do so at any time. As outlined in the terms of your lease, your housing association will usually have a set period of time to try and find a buyer for your home first - with Peabody, that’s eight weeks.
If your provider doesn’t manage to sell your home in that time, you can then go on to sell privately or through an estate agent of your choice. It’s worth noting that you’ll also need to obtain an independent valuation prior to sale to determine the current value of the property.
Help to Buy
You will have to pay back the Help to Buy equity loan when you sell your home or at the end of your mortgage period – which comes first. If you haven’t managed to repay the loan by the time you come to sell your home, then government will reclaim its percentage stake in your property at its current value. This means that if you buy using the 40% London Help to Buy equity loan, you will pay the government back 40% of the sale price when you sell.
You’ll also need to obtain an independent valuation prior to selling your home to determine the correct amount to be repaid.
Have any questions about Shared Ownership or Help to Buy?
If your still unsure about which affordable housing product best suits you, then get in touch with the Peabody team who can help answer any questions you have.
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