How overseas shared ownership schemes compare

The challenge of helping people into homeownership is not new, and New Zealand is not the first country to try to solve it. Governments, nonprofits, and private investors around the world have built ownership schemes of various kinds, some reaching hundreds of thousands of households, others stuck at a few dozen. Each makes a different trade-off between the investor's interests and the homeowner's interests.

What follows is a brief account of the six most instructive overseas models, followed by a comparison of how they, and Passive Partnerships, perform on the two dimensions that matter most: how well they serve homeowners who need access, and how compelling the proposition is for investors.

The six models

1. UK Shared Ownership

Shared Ownership is the UK's longest-running and largest shared equity scheme, administered through housing associations. Buyers purchase between 25% and 75% of a property and pay subsidised rent to the housing association on the remainder, with the option to buy additional shares over time (known as staircasing). The scheme has helped hundreds of thousands of households into homeownership and remains the dominant alternative tenure model in England.

The investor in this model is the housing association, a nonprofit that holds the unsold share, collects rent at 2.75% of its value, and benefits from appreciation if and when staircasing or a sale occurs. The resident still requires a bank mortgage on their owned share. Critically, the housing association retains an ongoing landlord relationship with the resident, which means maintenance responsibilities, service charges, and the associated administrative burden don't disappear. They just shift to a professional body rather than an individual.

2. UK Help to Buy (Equity Loan)

Launched in 2013 and closed to new applicants in England in 2023, Help to Buy was a government equity loan of up to 20% of a new-build property's value (40% in London), provided interest-free for the first five years. The buyer needed only a 5% deposit and a 75% mortgage, with the government's loan repaid as a percentage of the market value at sale or refinancing. Over its decade of operation, it supported more than 350,000 households in England alone.

From an investor-structure perspective, Help to Buy was arguably the cleanest shared equity model ever deployed at scale. The government held a passive, market-linked interest with no landlord role whatsoever. The homeowner owned 100% of the title, made all property decisions, and simply owed the government a proportional share of value at exit. The scheme's failure was not structural but political: it required ongoing government capital, was limited to new builds, and was withdrawn as house prices rose faster than intended.

3. HomeStart and KeyStart (Australia)

HomeStart Finance in South Australia and KeyStart in Western Australia are government-backed lenders that offer shared equity loans to buyers who cannot qualify for mainstream bank finance. HomeStart's Shared Equity Option provides between 5% and 25% of a property's purchase price as an interest-free, repayment-free loan, with the organisation sharing proportionally in the property's capital gain at sale. The homeowner holds 100% of the title and makes all property decisions.

Together, these two programs have helped well over 150,000 South Australians and Western Australians into homeownership since their founding in the late 1980s, and both continue to operate. The structure closely resembles what Help to Buy achieved in the UK, but the capital is government-sourced and the schemes operate at a state rather than national level. HomeStart reports that a third of its new borrowers now choose the shared equity option over a standard loan.

4. US Community Land Trusts

Community Land Trusts (CLTs) are nonprofit, community-controlled organisations that own land in perpetuity and sell the buildings on that land to homeowners via long-term ground leases. The resident owns their home, makes all property decisions, and pays a modest ground lease payment to the CLT. When they sell, a resale formula applies. Typically the homeowner keeps around 25% of the market appreciation, with the remainder retained by the CLT to keep the home affordable for the next buyer.

The flagship US example is Champlain Housing Trust in Burlington, Vermont, which has operated for 40 years and now manages approximately 3,000 homes. Across all US CLTs combined, around 25,000 units exist. The model produces genuinely good outcomes for residents, but scale is fundamentally constrained by the need for donated or subsidised land at the outset. Without a government or philanthropist providing land at below-market cost, the CLT cannot set prices low enough to serve its target market.

5. Brussels Community Land Trust

Founded in 2017, the Brussels Community Land Trust (CLTB) is the first CLT on the European continent and a World Habitat Award winner. It operates on the same principle as US CLTs: the trust owns the land under an emphyteutic lease, residents own the buildings, and a resale formula preserves long-term affordability. Homes are priced approximately 40% below market value. The CLTB delivered its first 23 permanently affordable co-owned units by 2021.

The CLTB has been candid about one structural limitation: it has explicitly stated that the return on investment it can offer is too low to attract even impact investors. The model relies on government land grants and public subsidy at every step. This is not a criticism of the model's design. It achieves genuine affordability in one of Europe's most expensive housing markets. But it does illustrate the ceiling on CLT scalability without a different approach to the investor proposition.

6. Unison (United States)

Unison is a San Francisco-based private company founded in 2004 that allows existing homeowners to convert a portion of their home equity into cash without monthly payments or interest. In exchange, Unison takes a share of the property's future appreciation or depreciation, typically investing up to 15% of a home's value and receiving a proportional share of the change in value at the end of the contract (up to 30 years). The homeowner retains full control of the property and has no landlord above them.

From an investor perspective, Unison's model is compelling: private capital from pension funds and university endowments earns a passive, market-linked return with zero landlord obligations. The scheme has invested in more than 10,000 homes across 30 US states. Its limitation for the purposes of this comparison is fundamental: it is designed exclusively for existing homeowners extracting equity, not for first-time buyers. Unison does not help anyone get into a home; it helps people who are already in one.

The comparison

The chart below plots each model against two dimensions: how well it serves investors (returns, passivity, no landlord obligations) and how well it serves homeowners who need access to ownership (scale achieved and quality of that access).

Figure 1. Shared ownership models plotted on investor proposition and homeowner access. Scores are qualitative assessments based on scale achieved, passivity of the investor role, market-linkage of returns, and quality of homeowner access. Government schemes score low on investor proposition not because the structure is poor but because private capital cannot access them.

The top-right quadrant, models that serve both investors and first-time buyers simultaneously, has been empty. There are structural reasons for this. Government schemes work because the public purse subsidises returns to a level private capital would not accept. CLTs work because donated land eliminates the input cost that would otherwise squeeze either homeowner affordability or investor returns. Unison works for investors because it serves existing homeowners, who are low-risk counterparties with established equity. None of these conditions exists in the problem that Passive Partnerships is trying to solve.

What Passive Partnerships proposes is that the trade-off between investor returns and homeowner access is not inherent. It is the product of structure. If the investor's cost base is low enough (0.14% per annum versus the ~1% that traditional landlord costs), if the counterparty is a co-owner with genuine equity rather than a tenant with limited financial stake, and if returns are linked to the regional property index rather than the idiosyncratic performance of a single asset, then a private investor can earn a competitive return from the same transaction that gives a buyer access to a home they could not otherwise afford.

The index investing parallel is instructive. Index funds unlocked capital for millions of retail investors not by finding a better way to pick stocks, but by reducing the structural costs of market participation to the point where average returns became a genuinely attractive outcome. Passive Partnerships applies the same logic to property: reduce participation costs enough that average returns are compelling, and private capital becomes available for a homeownership problem that previously required government subsidy to solve.

What is genuinely novel about Passive Partnerships

The overseas evidence shows that the individual components of Passive Partnerships have each been proven somewhere: market-linked passive returns (Help to Buy, Unison), nonprofit governance (CLTs), the resident bearing all running costs and decisions (CLTs, HomeStart), and no landlord relationship (all of the above). What has not existed until now is a single structure combining all of these — and specifically, one that does so without requiring government capital to make the numbers work.

Two structural cost savings make this possible, and each depends on the other.

The first is on the investor side. A traditional residential landlord incurs approximately $5,000–$7,000 per year in property management costs: maintenance coordination, vacancy risk, tenant administration and compliance that produce no return. In a Passive Partnership, every one of these costs disappears or belongs to the Resident Owner, who is a co-owner with a financial stake in the property, not a tenant. The investor's holding cost falls to near zero, which means a lower gross return produces a much higher net return compared to a landlord.

The second is on the buyer side. A first-home buyer using a bank mortgage to purchase 100% of a property typically pays $10,000 or more per year in bank margin, compliance overhead, and finance costs embedded in their repayments. A Passive Partnership removes all of the bank costs, and instead they pay an Occupancy Fee calculated on the Passive Owner's share at a rate that reflects the stripped-down cost of passive co-ownership rather than the blended cost of a bank loan.

The result is that the same property can simultaneously offer a private investor a market-linked, passive return that is higher than being a traditional landlord, and give a first-time buyer a cost-of-access lower than either renting or a full mortgage. That combination — private capital, genuine buyer access, no government subsidy — is the gap in the global evidence. It is what Passive Partnerships proposes to fill.