Why is shared ownership considered ownership?

Shared owners own their homes and can therefore be called homeowners. 

Shared ownership properties are usually leasehold, meaning that shared owners are leaseholders. This legal contract with the housing association is called a lease, and it makes them the homeowner. The lease states how long the lease is for, what the costs and fees are and the responsibilities of the homeowner. As the lease makes a shared owner the homeowner then they are responsible for all the repairs and maintenance in your home.

Legal view: Trowers & Hamlins  

The key difference between owning and renting a home is having your name registered with the Land Registry as legal owner to the registered title of the property. This can done either on a freehold basis or a long leasehold basis – with a shared ownership purchase, the property is always initially bought on a long leasehold basis. The lease contract you sign when you purchase a shared ownership property sets out the terms of your payment – usually on an initial purchase, the buyer pays somewhere between 25% and 75% of the full market value of the property they are buying. In return for this payment, they are registered as full legal owners of the long leasehold title for the property and the lease document sets out the monthly payment due to the Landlord in lieu of paying for the full 100% price for the property at the outset. This monthly payment is referred to as specified rent in the lease and the monthly rental amount can be reduced if the shared owner chooses to make a further payment to the landlord for a further percentage of the value of the property (referred to in the lease as staircasing). In some cases the shared owner may be able to purchase 100% of property which is referred to as final staircasing.

There are some quirks in leasehold law which affect shared ownership leases - along with any other long lease arrangement where the leaseholder pays a rent in excess of £250 a year (or £1000 in Greater London). If you are purchasing a shared ownership lease you do just need to ensure that you familiarise yourself with these aspects of shared ownership so you can make an informed decision – we have set out a bit more detail on these issues below.

Who to speak to

Ella Cheney, Shared Ownership Programme Manager