Shared Ownership: Initial Pride and Subsequent Challenges
When twin brothers Riccardo and Simone Bertagna purchased a share of a three-bedroom flat in Seven Sisters, north London, they expressed a sense of pride.
"It felt good. I felt I achieved something," says 35‑year‑old Riccardo.
The brothers acquired a 25% stake in the property, valued at £440,000, through a housing association. Their financial obligations included a mortgage, rent on the remaining 75% of the property, and a service charge of approximately £90 per month.
They viewed the purchase as a sound investment and a more stable alternative to renting in London. Additionally, their monthly costs were £50 less than when they were tenants.
However, a few years ago, the flat suffered significant damage due to an external leak. Increasing service charges and disputes over responsibility have left the brothers feeling "trapped" in what they describe as an "unsellable" property.
They report ongoing issues including leaks, a broken lift, "dirty" communal areas, and no visible improvements to the property or complex, while the monthly service charge has risen to nearly £300.
Their housing association stated that their concerns are under investigation and that shared ownership responsibilities are clearly outlined prior to purchase.
Riccardo and Simone are among approximately one hundred individuals who have contacted Your Voice, Your regarding difficulties encountered with shared ownership properties.
Understanding Shared Ownership
Shared ownership is a government-supported affordable housing scheme designed for eligible buyers who cannot afford a full deposit and mortgage and whose household income is below £80,000 (or £90,000 in London). It allows buyers to purchase a property in portions over time to facilitate home ownership.
Properties are typically sold through social landlords, often housing associations.
A report released by the National Audit Office (NAO) highlights that the complexities of shared ownership can result in customers facing unexpected issues such as rising service charges. Many participants do not fully comprehend the long-term financial risks involved.
While shared ownership schemes exist in Northern Ireland, Scotland, and Wales, in England it represents the largest affordable housing scheme for home ownership.
Affordability Concerns
Jamie Sugar, a single parent who purchased a 25% share of a three-bedroom flat in north London to live with her child and disabled mother, expresses significant affordability challenges.
"I don't think it's affordable at all."
Sugar reports that service charges have risen to over £8,000 annually, an increase of nearly 50% within four years. Starting in April, her monthly service charge will be £683, in addition to rent and mortgage payments. Housing costs now consume more than half of her income.
"My net income is about £2,998 a month, and my housing costs are now over 50% of that. It's just not sustainable."
"I knew there would be service charges," she adds, "but shared ownership was advertised as affordable housing."
Her housing association acknowledged her concerns about rising costs and committed to providing clarity on the charges.
There are approximately 250,000 shared ownership homes in England.
The NAO investigation found that increases in service charges can create affordability pressures over time. Shared owners, as leaseholders, are responsible for 100% of service charges, regardless of their ownership share.
Service charges cover building insurance, repairs, maintenance of property exteriors, cleaning of shared spaces, and upkeep of communal gardens. Although there is no official cap on these charges, they are expected to be "reasonable."
Unexpected Service Charge Increases
George Andain purchased a 45% share of a flat valued at £340,000 in central Brighton in 2021, viewing shared ownership as his "only chance of getting a foot on the property ladder."
Despite explicit inquiries by his family about service charges, they were reassured that increases would be unlikely.
Initially, the service charge for his one-bedroom flat was around £120 per month.
Affordability checks were passed, and the combined mortgage, rent, and service charges represented the upper limit of what he could manage.
However, 18 months later, he received a "shocking" letter notifying him that his monthly service charge would increase to £327, an amount he "absolutely just could not afford."
In the same year, he was informed that the housing association had underestimated the previous year's service charge, resulting in an additional bill exceeding £2,000.
"I feel trapped here," he says. "If we wanted to start a family, we're going to be in a one‑bed flat until there's some kind of resolution."
The NAO notes that the unpredictable nature of service charge increases poses the greatest risk to households with limited financial flexibility after initial affordability assessments.
While service charge issues are currently under consultation through the Leasehold and Freehold Reform Act 2024, George advocates for regulation of these charges akin to social rent caps.
His housing association explained that a managing agent appointed by the freeholder sets the service charge and that it has challenged increases and requested justifications.
Sir Geoffrey Clifton‑Brown, Chair of the Committee of Public Accounts, acknowledged that while shared ownership provides a "pathway" to homeownership, it is "wholly unsatisfactory" that buyers face cost pressures and complexities.
Barriers to Staircasing and Selling
The NAO report also examines barriers to staircasing, the process by which shared owners can purchase additional shares of their property.
Each staircasing transaction requires funding the equity purchase, paying for a Royal Institution of Chartered Surveyors (RICS) property valuation, additional legal fees, and a landlord administration fee.
Rising service charges further reduce available income, creating additional obstacles to staircasing.
Some shared owners report that high service charges prevent mortgage lenders from offering loans, leaving them unable to increase their ownership share or sell their property.
George Andain describes his situation as feeling "trapped" in his flat due to these constraints.
Complexities of Staircasing
Patrick Duffy and his NHS-worker partner, Lewis, successfully staircased from a 40% to a 60% share of their east London flat, but describe the process as "messy and complicated."
They pay rent on 40% of the home, maintain two separate mortgages with different interest rates, and face a service charge of £602 per month.
"The system is supposed to be affordable housing, but it's wildly unaffordable," Patrick states.
Patrick notes that while some friends have staircased to full ownership successfully, his experience reveals too many unregulated elements.
Long-Term Financial Outlook
The NAO report forecasts that shared ownership will be cheaper than private renting in 93% of areas across England over a 10-year period.
On average, shared owners are expected to be £29,000 better off over ten years, increasing to £42,000 in London.
The Shared Owners' Network has called on the NAO to conduct a Value for Money investigation to assess whether the scheme truly provides affordable homes, meets policy objectives, and uses public funds effectively.
The National Housing Federation and the government maintain that shared ownership remains a vital route onto the housing ladder but acknowledge challenges for some buyers, particularly regarding rising service charges. Efforts are underway to improve transparency and protections.
In 2024–25, 20,353 shared-ownership homes were built using grant funding, the highest number in a decade, representing 11% of all new-build homes supplied.
Further homes are planned as part of government initiatives to build 1.5 million homes. However, the NAO cautions that the government must "make this scheme work better" to provide genuinely affordable housing.
