Quick answer
Shared ownership rent on a new home is a percentage of the value of the share you don't own: at most 3% a year outside London, where most landlords charge 2.75%, and capped at 2.75% in London. Buy 40% of a £300,000 home and the rent on the other £180,000 is £412.50 a month.
It goes up once a year, by at most CPI plus 1% on leases granted from 12 October 2023, or RPI plus 0.5% on older ones. Buying more shares cuts it in proportion, and at 100% it stops.
In this guide
How the starting rent is set
When a shared ownership home is first sold, the landlord sets the rent as a yearly percentage of the value of the share it keeps (the “unsold equity”). For homes built with Homes England funding, that can be at most 3%, and landlords are encouraged to average no more than 2.75% across their new homes. Any ground rent or estate rent counts towards the same limit. In London, the GLA makes 2.75% a hard cap.
Buying a 40% share of a £300,000 home, the landlord keeps 60%, worth £180,000. At 2.75% that is £4,950 a year, or £412.50 a month. At the 3% cap it would be £450.00 a month. The smaller the share you buy, the bigger the rent:
| Your share | Landlord's share | Rent a month |
|---|---|---|
| 25% | £225,000 | £515.63 |
| 40% | £180,000 | £412.50 |
| 50% | £150,000 | £343.75 |
| 75% | £75,000 | £171.88 |
Starting rent on a £300,000 home at 2.75% a year of the unsold share.
Buying a resale is different. The rent isn't recalculated when a home is resold: you take over whatever the seller pays, including every yearly increase since the lease began. That can be noticeably more than 2.75% of today's value, so use the rent on the listing, not a percentage.
How much shared ownership rent goes up each year
Your lease sets a review date, usually once a year, and the landlord has to give you written notice of the new rent. The most it can rise by depends on when your lease was granted, not on whether it is a new or older style of lease:
- Leases granted from 12 October 2023: up to CPI plus 1%. If CPI is 0%, the most is 1%; if CPI is minus 1% or lower, the most is 0%.
- Older leases: up to RPI plus 0.5%, with a maximum of 0.5% when RPI is nil or negative. Some homes whose funding was agreed before 12 October 2023 also kept RPI leases, and landlords can move older leases over to CPI.
These are ceilings. The landlord can put the rent up by less, or freeze it, and on the October 2023 leases it can choose to reduce it. Shared ownership rent sits outside the government's social housing rent rules, so the 7% ceiling on social rents in 2023-24 didn't apply to it, although housing associations holding most shared ownership homes voluntarily kept their rises to 7% that year.
Your Key Information Document shows an example of how the rent could grow, using 5% a year for CPI-based leases and 6% for RPI-based ones. On the £412.50 rent above, that looks like this:
| Year | CPI lease, +5% a year | RPI lease, +6% a year |
|---|---|---|
| Now | £412.50 | £412.50 |
| After 1 year | £433.13 | £437.25 |
| After 2 years | £454.78 | £463.49 |
| After 3 years | £477.52 | £491.29 |
| After 4 years | £501.40 | £520.77 |
| After 5 years | £526.47 | £552.02 |
Illustration at the Key Information Document's example rates, not a forecast. Real rises follow CPI or RPI each year.
See what you could borrow with the rent counted
Enter the price, your share, deposit, rent and service charge, and see what lenders might lend on the share. No credit search.
Start My Free CheckWhat staircasing does to your rent
Each time you buy more shares (staircasing), the rent falls in proportion to the share you still don't own, and this includes the 1% steps newer leases allow. The cut is worked from your current rent, not from the home's new value. Go from 40% to 50% in the example above, and the landlord's share falls from 60% to 50%, so the rent falls from £412.50 to £343.75 a month.
The new shares themselves are priced at the home's value at the time, so a rising market makes staircasing dearer even as it cuts the rent. At 100% the rent drops to a nominal “peppercorn”. Two exceptions: in some rural protected areas you can only buy up to 80%, so rent continues on the last 20%; and under older people's shared ownership no rent is due once you own 75%.
Try your own figures below: the calculator projects the rent, service charge and mortgage year by year, with staircasing steps.
Share value £75,000
5% of your share
Your figures
Illustration, not a personal recommendation- Total spend over 25 years
- £407,564
- First-year monthly cost
- £1,064
- Share owned at the end
- 25%
- Equity at the end
- £123,045
Assumes a 5.75% mortgage over 25 years, a lease signed now, with rent rising CPI + 1% (CPI at a long-run 2%), and house prices growing 2% a year (they can fall). Change any of these, add staircasing and compare with renting in the full calculator.
Open the full calculatorService charge, ground rent and repairs
The rent is only part of what you pay the landlord. You pay 100% of the service charge for your home whatever share you own. The landlord sets it under the lease and has to follow service charge law, but it isn't capped the way the rent is, and it can rise faster. Ground rent is nil or a peppercorn on homes funded by Homes England where contracts were exchanged from 23 May 2022.
On the newer leases, the landlord pays for essential repairs to the structure and exterior for the first 10 years, and you can claim up to £500 a year towards repairs to the water, gas, electricity and heating installations. On older leases you are responsible for all maintenance, whatever share you own.
How the rent affects what you can borrow
Both affordability checks count the rent. Mortgage lenders take the rent and service charge off as monthly commitments before working out your loan, so a higher rent means a smaller maximum mortgage. The housing association's check, outside London, goes further and stress-tests the rent five years ahead: 2.75% of the unsold share becomes about 3.51% on a CPI-based lease (3.68% on an RPI-based one), which on the example above is £526.47 a month rather than £412.50. Your mortgage payment should then be no more than about 30% of what is left of your take-home pay. The service charge is counted at today's figure.
Our guide to shared ownership eligibility and affordability shows how much you might need to earn, and when you come to sell, the buyer takes over your rent: see selling a shared ownership home.
Frequently asked questions
How much is shared ownership rent?
On a new home the starting rent is set as a percentage of the value of the share you don't own. Outside London it can be at most 3% a year, and most landlords charge 2.75%. In London 2.75% is the cap. Buying a 40% share of a £300,000 home leaves £180,000 unsold, so the rent at 2.75% is £412.50 a month. On a resale you take over the seller's current rent.
How much does shared ownership rent go up each year?
It depends on when the lease was granted. Leases granted from 12 October 2023 normally allow a rise of up to CPI plus 1% a year. Older leases, and some homes whose funding was agreed before that date, allow up to RPI plus 0.5%. Those are maximums: the landlord can put the rent up by less, or freeze it.
Can shared ownership rent go down?
Not usually. On the leases Homes England introduced in October 2023, the landlord can choose to reduce the rent but doesn't have to. On those leases, if CPI is minus 1% or lower, the most the rent can rise is 0%. The usual way to lower your rent is to buy a bigger share.
Is there a cap on shared ownership rent increases?
The cap is the formula in your lease: CPI plus 1% or RPI plus 0.5%. Shared ownership rent is not covered by the government's social housing rent rules, so the 7% ceiling on social rents in 2023-24 did not apply. Housing associations holding most shared ownership homes voluntarily limited rises to 7% that year. We found no cap, government or voluntary, for 2024-25.
Do I still pay rent if I staircase to 100%?
No. The rent falls in proportion every time you buy more, and once you own 100% it drops to a nominal "peppercorn". The exceptions are homes in some rural protected areas where you can only buy up to 80%, so rent continues on the last 20%, and older people's shared ownership, where no rent is due once you own 75%. If the home is a flat you stay a leaseholder, so the service charge continues.
Does the rent change when I buy a resale?
No. The rent isn't recalculated when a shared ownership home is resold: you take over the rent the seller was paying, including all the yearly increases since the lease began. Check the current rent on the listing rather than working it out from the price.
This guide is information, not advice, and is not a recommendation to take out any specific mortgage product. We are not FCA authorised. Shared ownership rules depend on your lease and your housing association, and lender criteria change, so confirm them with your housing association, the lender or a qualified, FCA-authorised adviser before you act.