Shared Ownership: Terms & Conditions

What should you know before buying a Shared Ownership home?

As a specialist property portal for alternative housing options and an independent, educational resource offering information about the Shared Ownership scheme, Share to Buy aims to help first time buyers take a step onto the property ladder.

The government’s part-buy part-rent product has helped hundreds of thousands of people purchase a home over the last four decades but deciding to buy is a choice which shouldn’t be taken lightly, and requires a lot of research to ensure you’re making the right decision for you.

In this guide, we’ve outlined some of the important terms and conditions when buying through Shared Ownership to ensure you have the details you need to make an informed decision.

Leasehold homes

Shared Ownership homes are sold on a leasehold basis. A lease is a contract giving you the right to occupy and use your property for a set period of time – or the ‘term’ of the lease. The lease is a legally binding contract between yourself as the leaseholder, and the landlord (usually a housing association or local authority) who owns the freehold of the property.

Whether buying through Shared Ownership or not, if you live in a leasehold property, everything you and your landlord do in relation to your home is governed by the conditions of your lease.

Leasehold ownership usually relates to everything within the four walls of the property while the structure and common parts of a building, as well as the land it stands on, are owned by the freeholder. The freeholder is responsible for the maintenance and repair of the building, with costs for doing so being recoverable through the service charges which are billed to the leaseholders.

If you would like to find out more about leasehold homes, LEASE are an independent body who offer free, independent advice to leaseholders.

Long tenancies

To put it simply, leasehold ownership is a long tenancy which gives the shared owner a right to occupy the property for a long period of time.

To date, leasehold terms have usually been for 99 or 125 years and the property can be bought or sold during that time. However, under the new Shared Ownership model as part of the government’s Affordable Homes Programme, it is expected that leases will be extended to 999 years as standard.

Generally speaking, all apartments are sold on a leasehold basis, regardless of tenure. If you purchase a house through the Shared Ownership scheme and go on to staircase to 100% ownership, you may be able to buy the freehold from the housing association. Policies may differ so we would recommend discussing this option with your provider at the outset, before you purchase the property.

If you would like to find out more about leasehold homes, LEASE are an independent body who offer free, independent advice to leaseholders.

Lease extensions

A lease extension is a contract between yourself as the leaseholder and your housing provider as the freeholder which adds a continuation period to the terms of a long-lease. While lease extensions are available on Shared Ownership homes, there are various factors that can affect the process.

A Shared Ownership lease is specifically excluded from the right to extend under the terms of the Leasehold Reform Housing and Urban Development Act 1993, unless the leaseholder owns 100% of the lease, meaning that the shared owner has staircased to full ownership of their property.

However, most housing providers now have their own informal policies in place, allowing lease extensions where there is less than 100% ownership. We would recommend discussing this with your provider at the outset.

If you would like to find out more about leasehold extensions, please visit the LEASE website’s FAQ page.

Rent calculations

When a lease is first issued, the rent that the leaseholder pays in a leasehold home is generally calculated at 3% of the share still owed by the housing association/landlord. This means that if the property is worth £100,000 and the landlord’s share is 50% – equating to £50,000 – the 3% rent to be paid by you as the leaseholder is £1,500 per year or £125 per month.

As a shared owner, your rent will likely increase each year in line with increases to the Retail Price Index (RPI), plus an additional amount. This additional amount typically ranges between 0.5% and 2%, with this information being outlined in the terms of your lease.

Service charges

Service charges are payments made by you as the occupier to the relevant housing association for the services they provide. These include maintenance and repairs to communal areas, insurance of the building and in some cases, the provision of lifts, lighting, communal aerials, door entry systems, cleaning of common areas, ground maintenance, etc.

All Shared Ownership leases must contain a clause with information about the payment of service charges. In the case of Shared Ownership apartments, this will be in the same terms as any other lease of a flat where the leaseholder pays the full service charge and not a proportion in accordance with their equity share.

For a leasehold house built on a private estate or development, a service charge may be payable for the maintenance of pathways, private roads and other communal areas.

Repairs and maintenance

As part of the existing Shared Ownership scheme, all internal repairs and maintenance to the home are your responsibility, regardless of the share you own. Most new homes come with a one year warranty period for defects and a longer warranty to cover any structural problems caused by poor workmanship.

However, as part of the updated Shared Ownership model, there has been the introduction of a 10 year repair warranty during which the shared owner will receive support from their housing provider/landlord to pay for essential repairs. This will be applicable on new build homes available through the government’s Affordable Homes Programme.

On the other hand, the housing provider or manager will generally be responsible for any communal parts of the building or grounds. You pay a service charge to the housing provide which is used to cover the costs of maintenance and decoration to communal areas.


If a shared owner is unable to keep up repayments on their Shared Ownership home, their property may be at risk of repossession. There are similar processes in place for people who aren’t able to make repayments on other mortgages and loans.

If you own a Shared Ownership property and are struggling to keep up with your rent or mortgage payments, you should contact your housing association as soon as possible to discuss the options available to you. Your housing provider may be able to set up a payment plan, helping you to cover existing rent arrears and any future rent payments.

We would also recommend speaking to your mortgage lender as soon as possible. The lender may be able to offer options which could help you continue to make monthly payments at a more affordable level.

Please note that we will continue to add further information to this page and update details as and when policies change. Information correct as of November 11th, 2022.