buying

Share of ownership, renting or buying outright: monthly cost compared on one example

Share of ownership compared with renting and buying outright on one £250,000 example: monthly cost at three illustrative rates and the GOV.UK rent limit.

4 min read
Last reviewed 4 November 2026
By Your Property Check team

Part 1 of 6

The example and its limits

General information, not advice. Read our Terms. This compares three routes on one made-up home worth £250,000, in England, checked on 4 November 2026. The price is close to the West Midlands average of £250,731 in the UK House Price Index for August 2026. The rent is the Office for National Statistics average for a two-bedroom private rent in Birmingham in August 2026, £1,003 a month, up 3.0% on a year earlier. It is one example, not a typical case, and we do not recommend any route. For how the scheme works and how to sell, read our shared ownership guide.

Part 2 of 6

What GOV.UK says about shared ownership

GOV.UK says you can buy a share of between 10% and 75% of a home's full market value, usually 25% to 75%. The deposit is usually between 5% and 10% of the share you are buying. You pay rent to the landlord on the share they own. For new-build homes the rent limit is 3% of the value of the share the landlord owns, and most landlords charge 2.75%. On resale homes the rent starts at what the previous owner paid. Rent is reviewed at times set in your lease, can rise but never fall, and GOV.UK says buying more shares lowers it. You usually also pay ground rent and service charges, and GOV.UK gives no amounts.

Part 3 of 6

The assumptions

Home value £250,000. A 50% share is £125,000.
Deposit 10% of the share, £12,500. GOV.UK's lower figure, 5%, would be £6,250.
Rent on the unsold £125,000 at 2.75%, £286 a month. At the 3% limit it would be £313.
Repayment mortgages over 25 years at 4%, 5% and 6%. These are illustrations we chose to show how the answer moves. They are not quotes or forecasts, and we found no official current mortgage rate to use.
Buying outright: 10% deposit of £25,000 and a £225,000 loan.

Part 4 of 6

Monthly cost compared

Cost line	Shared ownership (50%)	Rent (Birmingham two-bed)	Buy outright with mortgage
Deposit paid up front	£12,500	None in this table	£25,000
Mortgage loan	£112,500	None	£225,000
Mortgage payment at 4%	£594	None	£1,188
Mortgage payment at 5%	£658	None	£1,315
Mortgage payment at 6%	£725	None	£1,450
Rent on the unsold share (2.75%)	£286	None	None
Rent to a landlord	None	£1,003	None
Total at 4%	£880	£1,003	£1,188
Total at 5%	£944	£1,003	£1,315
Total at 6%	£1,011	£1,003	£1,450
Not included	Ground rent, service charge, insurance, repairs	Contents insurance	Insurance, repairs, any service charge

Totals are rounded to the nearest pound. At 4% and 5% the shared ownership total is lower than the rent, by £123 and £59 a month. At 6% it is £8 a month higher before any service charge, so the service charge decides the result in that case. Buying outright is the highest monthly cost in each column but builds equity in all of the home, not half of it.

Part 5 of 6

What the table leaves out

Service charge and ground rent have no sourced amount, so the shared ownership total is a floor. Shared ownership rent rises with the lease formula. For leases signed before 12 October 2023, GOV.UK says the maximum rise is the retail prices index over the previous 12 months plus 0.5%. After that date it is either RPI plus up to 0.5% or CPI plus 1%, so check your lease. Private rents also rise: Birmingham's average was up 3.0% on the year.

There are one-off costs too. Our stamp duty calculator works out the tax for an outright purchase, and we give no figure for stamp duty on a shared ownership purchase because we did not verify the rules. Read about the deposit and other costs in the cost of moving house.

Part 6 of 6

Questions to ask

Is the rent limit 2.75%, 3% or the previous owner's level?
What are the service charge and ground rent, and how do they change?
Which index does the rent review use?
What does it cost to buy more shares or to sell?

Our ROI calculator can compare returns if you are investing, and the mortgage in principle guide covers the first lender check.

This page is general information, not advice.

Our take

The service charge can decide the result

Our view: in our example the monthly totals sit close together, and the service charge can tip them. At 6% the shared ownership total is £1,011 against £1,003 rent, before any service charge. The common mistake is comparing mortgage payments alone and leaving out service charge, ground rent and one-off costs.

Our stamp duty calculator covers SDLT, LBTT and LTT, including first-time buyer and additional-property rates, for an outright purchase. Before you offer on a specific home, OfferCheck is a plain-English risk report on any UK address: crime, flood, planning, tenure and more, every figure sourced.

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Our opinion, drawn from the facts on this page: not advice and not a forecast. We earn from OfferCheck reports and from introducing sellers to cash buyers, so weigh it with that in mind (see our disclosure). We are not authorised or regulated by the FCA.

Questions, answered

Frequently asked questions

Is shared ownership cheaper than renting?

It depends on the mortgage rate and the charges. In our £250,000 example a 50% share cost £880 a month at 4% and £944 at 5%, against £1,003 to rent, but £1,011 at 6%, before service charge.

What is the rent on the unsold share?

GOV.UK says the new-build rent limit is 3% of the value of the share the landlord owns, and most landlords charge 2.75%. Resale rent starts at the previous owner's level.

What service charge applies?

GOV.UK says you usually pay ground rent and service charges but gives no amounts. Check your lease and ask the landlord, because it is not in our totals.

What deposit is needed for shared ownership?

GOV.UK says the deposit is usually between 5% and 10% of the share you are buying. On a 50% share of a £250,000 home, that is £6,250 to £12,500.

Do the mortgage rates in the table reflect today's market?

No. The 4%, 5% and 6% rates are illustrations we chose to show sensitivity. They are not quotes or forecasts. Ask a lender or regulated broker for current rates.

Where this comes from

Sources

Last reviewed 4 November 2026 by the Your Property Check team. This page is general information, not legal, tax or financial advice. For your own situation, speak to a conveyancing solicitor or another qualified professional.