How to Calculate Share Ownership in a Property
Thinking about buying a slice of a house? You need to know exactly what percentage you’ll own and what that means for mortgage payments, service charges, and future resale. The good news is the maths is simple once you break it down.
Step 1 – Find the Total Value and Your Deposit
Start with the full market price of the property. Let’s say the house is £250,000. Next, decide how much you can put down. If you have £50,000 for a deposit, that’s 20% of the total price. In shared ownership, that 20% is usually the share you’ll own outright.
Formula: Share % = (Your Deposit ÷ Property Price) × 100. Plug the numbers: (50,000 ÷ 250,000) × 100 = 20%.
Step 2 – Work Out Ongoing Costs on Your Share
Mortgage payments, service charges, and ground rent are usually calculated on the share you own. If the monthly mortgage for the whole house is £1,200, you’ll pay 20% of that: £240. Same rule applies to service charges – if the building’s monthly service charge is £300, your part is £60.
Don’t forget the rent on the remaining share. In most schemes you’ll rent the other 80% from a housing association at a reduced rate, often around 2.5% of the market rent. If the full rent would be £800, you’d pay 2.5% of £800 × 80% = £16 per month.
Putting it together, your total monthly outgo might look like this:
- Mortgage (20%): £240
- Service charge (20%): £60
- Rent on 80%: £16
Total = £316 per month. That’s the number you compare to your budget.
If you want to increase your share later, the calculation works the same way – just replace the old percentage with the new one and recalculate the mortgage and rent parts.
Quick tip: use an online share ownership calculator. Enter the property price, your deposit, and the current rent rate, and the tool spits out the monthly cost, how much equity you’ll build, and when you could stair‑casing (buying more shares).
Remember to check the lease length. A short lease can affect resale value and the cost of buying extra shares later. Most schemes recommend at least a 99‑year lease.
Finally, keep an eye on extra fees – valuation, legal, and administration charges. They’re usually a one‑off cost but can add up to a few thousand pounds.
By breaking the numbers down into share %, mortgage on your share, service charge on your share, and rent on the rest, you’ll have a clear picture of what you’re really paying. Use the simple formula, run the numbers with a calculator, and you’ll know if the deal fits your budget before you sign any papers.
