How alternative buying schemes tackle the housing challenges faced by Londoners
Increasing property prices, old homes in disrepair, and a shrinking rental market with rising rents. These are just some of the challenges Londoners face in 2025 as the capital’s housing crisis continues. But there are opportunities to feel hopeful about, as alternative buying and renting schemes offer solutions.
In this blog, we’re delving into housing initiatives like Shared Ownership, London Living Rent and Discount Market Sale, and how they address the issues faced by Londoners navigating the housing market.
Shared Ownership
In our most recent buyer intention survey, where we questioned over 2,200 users of sharetobuy.com, 83% of budding buyers cited rising rents and an increasingly competitive rental market as their main reasons for wanting to buy a home. But making the move from renting to owning in London brings with it a unique set of challenges. For one, the price of properties and the subsequent size of the deposit needed to buy one.
As of December 2024, the average London home price for a first time buyer was £473,282. A 20% deposit on a property of this price would equate to £94,656. For many people, saving this amount would be a challenge; 36% of the Londoners we surveyed said that saving enough for a deposit is their biggest barrier to homeownership. Another 36% stated that their salary not being high enough to borrow the amount needed to purchase a home is their greatest hurdle.
Shared Ownership is an alternative home-buying scheme that offers a solution to these challenges. It’s available to eligible buyers with an annual household income of £90,000 or less in the capital. Plus, the required deposit is based on the share value being purchased, rather than the full value of the property. For instance, if you purchased a 10% share of a home worth £300,000, your owned share would be £30,000. You’d pay a deposit between 5%-15% of this share, meaning the minimum deposit you’d need could be from just £1,500.
Furthermore, the monthly cost of a Shared Ownership home in London can be lower than buying outright or renting privately. For example, based on our current property listings, the average monthly cost for a one bedroom Shared Ownership home in London is £1,427. Meanwhile, the current average private rent in the capital is around £2,200 per month.
How does Shared Ownership work?
Shared Ownership allows you to step onto the property ladder at a reduced cost, as you’ll purchase a share – typically between 10%-75% of the market value – and pay subsidised rent to your housing association on the rest. In most cases, you can choose to staircase to full ownership by purchasing more shares as and when your income increases.
Most Shared Ownership London homes are new-builds constructed with modern building techniques, providing high-quality homes in desirable locations across the capital. On the other hand, resales are pre-loved properties which were previously bought as new-builds through the Shared Ownership scheme. Read our guide to new-builds and resales to help you choose what’s best for you.
How does Older Persons Shared Ownership work?
If you’re aged 55 or above, you could be eligible for Older Persons Shared Ownership. This scheme operates in much the same way as Shared Ownership, the main difference – apart from the age restriction – being that the maximum share that you can buy is normally 75%, rather than the usual 100%. However, once you reach 75% ownership, no rent is payable on the remaining 25%.
London Living Rent
Over the past four years, a shrinking private rental market and rising rents have contributed to the London housing crisis. Research by Savills found that between April 2021 and December 2023, 45,000 rental properties were sold without replacement, accounting for 4.3% of London’s privately rented homes.
This reduction in supply has come at a time when the cost of living has increased, including the price of London rentals. Data from the Office for National Statistics shows that the average London private rent in January 2025 was £2,227, an increase of 11% from the previous year.
However, there is another way to rent a home in the capital. London Living Rent is a housing scheme available to middle-income households who live or work in London and want to build savings to buy a home through Shared Ownership. On average, rent amounts are typically two-thirds of the amount of the average market rent. In our recent analysis of properties on Share to Buy, we found the average monthly cost for a one bedroom London Living Rent property in the capital is £1,250, nearly £1,000 less than the average private rental.
How does London Living Rent work?
The London Living Rent scheme provides high-quality homes to eligible renters on long-term tenancies (a minimum of three years and up to a maximum of 10 years). Rent amounts are based on a third of local household incomes and adjusted for the number of bedrooms in a home, so rent prices can vary depending on where you live. However, the Mayor of London sets rent benchmarks annually to ensure rents remain affordable to eligible households with a maximum annual income of £67,000. The current benchmarks are capped at £1,563 per month for all homes, inclusive of service charges.
Deposit Unlock
As we previously mentioned, first time buyers in London face average property prices of £473,282, where a 20% deposit would be £94,656. This rises to an average of £676,998 for previous homeowners, who would need £135,399 for a 20% deposit.
Deposit Unlock addresses the average deposit needed to purchase a new-build home. Usually, mortgage lenders set the minimum deposit for new-builds between 15%-25%, but Deposit Unlock enables first time buyers, home movers and previous homeowners to purchase a new-build home from a participating housebuilder with just a 5% deposit.
How does Deposit Unlock work?
Deposit Unlock requires you to pay a 5% deposit and take out a 95% mortgage up to £750,000 with a participating lender. The scheme is only available through participating homebuilders, as they provide the lender with an insurance-backed guarantee, reducing risk to the lender and enabling them to offer competitive mortgage rates, which can make the home-buying process more affordable. Learn more about the scheme and find participating homebuilders here.
Other buying schemes to help Londoners navigate the 2025 housing market
Discount Market Sale
Discount Market Sale is designed to help first time buyers in London purchase a home at a reduced cost. Participating housing providers offer a discount, usually around 20%, of the purchase price on new-build properties, making homeownership cheaper and more accessible. This buying scheme is exclusively available to people living or working in London whose income doesn’t exceed 45% of the Discount Market Sale price of the property. Find out more about the scheme and its eligibility criteria.
Discount Full Ownership
Discount Full Ownership is a buying scheme from innovative housing provider Pocket Living. It enables you to own 100% of your home for 20% less than the full market value. Exclusively available to people living or working in London, the scheme is designed for middle-income households with savings to put towards a deposit. Other eligibility criteria apply, which you can learn more about here. Our guide to Discount Full Ownership also provides more information about the scheme.
Intermediate Rent
Intermediate Rent is available to eligible renters who want to save towards buying a home through alternative options like Shared Ownership. It allows you to rent a new or refurbished home for less than the market rate. Rents are subsidised at approximately 20% lower than you would expect to pay for a similar property when renting privately. Usually, under the scheme, you’ll rent a home on an assured shorthold tenancy basis with a six-month contract period. However, you may have the opportunity to extend the contract depending on the landlord’s plans for the property.
While London’s housing crisis continues to present challenges, these alternative buying and rental schemes offer solutions that can help many Londoners work towards or fully realise their dream of homeownership. Search for houses and apartments under these schemes by exploring available homes in London.
At Share to Buy, we make your choice easier with a selection of new-build homes and resale properties across England, available through alternative homeownership schemes such as Shared Ownership. Get your home-buying journey underway using our property portal.
