Shared Equity: What is it and how does it work?

How can the Shared Equity scheme help me buy a home?

What is the Shared Equity scheme?

With Shared Equity, a buyer pays for part of a property while a housing provider, developer or lender helps cover the rest with an equity loan. The buyer owns the home but because another party helped pay towards it, they also hold a share in the property’s value.

You will need to pay back the loan either through repayments while living in the property, or if you choose to sell. When you do pay back the loan, it’ll be based on the percentage share of the home’s value at that time, not the amount that was initially lent to you. This means that the amount you owe can go up or down based on the current value of the property.  

How does a Shared Equity mortgage work?

Shared Equity means you legally own 100% of the home – but a portion of the purchase price is funded by an equity loan. When you sell or repay the loan, the lender takes back their share of the property’s value, which may have gone up or down over time.

A Shared Equity mortgage is designed to make buying a home more accessible by combining your deposit and a standard mortgage with an equity loan that covers part of the property’s value. This means you can purchase a home with a smaller deposit and lower monthly mortgage repayments than with a traditional mortgage.

Where can I find a Shared Equity home?

Government-backed Shared Equity schemes (such as the Help to Buy: Equity Loan which ended in 2023) are not currently available, but some developers and housing providers offer their own Shared Equity schemes on specific developments.

Ready to explore your options with Shared Equity? Use our property search tool to discover available new-build homes from participating developers. You can also learn more about the scheme, including detailed eligibility requirements and a breakdown of the associated costs and affordability right here on Share to Buy.