The new model shared ownership lease – a recap of what to expect

06 May 2021

With the government set to release the eagerly anticipated new model shared ownership lease later this month, we thought it would be the perfect opportunity to recap what we are expecting to see.

The new model lease has been widely discussed since the government announced that it would be reforming the shared ownership model, receiving a mixed reaction from Registered Providers and the wider housing sector. It’s another move by the government to increase home ownership by opening up the market to those households on lower incomes. Although the new model seeks to benefit leaseholders, Registered Providers have voiced concerns around the negative impact it may have on the financial viability of future schemes and the additional costs and onerous management obligations they will have to comply with.

The key changes to the shared ownership model lease we expect to see are as follows:

Reducing the initial minimum stake

One of the barriers to obtaining a shared ownership property is the requirement to purchase a minimum stake of 25% of the value. In order to open up the market even further to those on lower incomes, the initial stake has been reduced to 10% making home ownership a more realistic opportunity for many.

Gradual staircasing

In a further effort to increase the uptake on shared ownership the new model lease will make it easier and more affordable for leaseholders to increase their equity in the property by increments of only 1%. The 1% share will be based on an estimated valuation linked to the original purchase price keeping in line with house price inflation. A further advantage to leaseholders is that they will no longer have to instruct a surveyor to carry out the valuation and Registered Providers will not be able to charge administration fees.

Repairs and maintenance

Perhaps the most radical change to the shared ownership model is the new 10 year repair free period, where the leaseholder will receive support from their landlord for essential repairs. The 10 year period applies to new build homes for the first 10 years of its life so where a leaseholder sells their interest in the property after 5 years of the property being built, the new leaseholder will benefit from this policy for a further 5 years.

External repairs

Landlords will now be responsible for the cost of essential repairs to the external fabric of the building, repairs to walls, floors, ceilings and stairs inside of the home but only where the repair is not covered by a new build guarantee such as a NHBC warranty.

Internal repairs

Leaseholders will remain responsible for repairs inside the property but are now able to claim costs from their landlord for the essential repair or replacement of certain items such as gas and electricity installations, baths and sinks. The added incentive for leaseholders is the ability to now claim up to a maximum of £500 per year in repair costs which can be rolled over into the following year (to a maximum value of £500) where the repair is not due to improper use.

Nominations period

In an effort to give leaseholders more control when they come to sell their shared ownership property, the 8 week period giving the landlord the exclusive right to market the property is being reduced. Leaseholders will now have the option to cut short the 8 week period to 4 weeks if they wish to sell the property on the open market sooner.

990 year lease

In the government’s recent response to its technical consultation on the new shared ownership model it announced that it would be reforming the current model lease by increasing the lease term on new build homes from 99 years to 990 years. This reform is a huge cost saving to leaseholders and will certainly be seen as an advantage to prospective homeowners who can now avoid the timely and expensive process of lease extensions.

What effect will the reforms have on the shared ownership market?

The changes to the new model lease will certainly be attractive to leaseholders as in theory it should result in reduced maintenance costs, more control on resales, and a more affordable route to own 100% of the property.

However, shared ownership has historically been a hugely popular affordable housing product so many people within the housing sector will be questioning why such reforms are required. There is still a lot of detail that needs to be provided by the government to understand how a number of these reforms will operate, and with no pilot scheme having taken place prior to its rollout many Registered Providers are understandably nervous about its arrival.

Increasing the opportunity for lower income households to achieve home ownership is a positive step for aspiring homeowners, but what remains to be seen is will these reforms have a positive or negative impact on the shared ownership market, especially in light of the ongoing EWS1 issues.

If you would like to know more about shared ownership please get in touch with Lee Stone on 0203 553 4893 or [email protected]. Alternatively, please contact another member of Birketts’ Social Housing Team.


The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at May 2021.


Lee Stone


+44 (0)203 553 4893


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