Understanding Shared Ownership
Shared ownership is a government-backed scheme designed to help people get onto the property ladder. With shared ownership, you buy a share of a home – usually between 25% and 75% – and pay rent on the remaining share, which is owned by a housing association or another provider. Over time, you may have the option to buy more shares in your home, a process known as “staircasing.”
Unlike full ownership, where you own 100% of the property and have complete control, shared ownership means you are both a homeowner and a tenant. You are responsible for your share of the property, including repairs and maintenance, but you also have a landlord – the housing provider – who owns the rest. This dual status affects what you can and cannot do with your home.
One of the main differences is the restrictions around renting out your property. With full ownership, you generally have the right to let out your home if you choose, subject to any mortgage conditions. However, with shared ownership, there are usually strict rules against subletting or renting out your home without permission. This is because shared ownership is intended to help people buy a home to live in, not as an investment or to generate rental income.
These rules are set out in your shared ownership lease and enforced by your housing provider. Renting out your shared ownership property without consent can lead to legal action or even losing your home. If your circumstances change and you need to rent out your property, you must apply for permission and follow the correct procedures.
If you are considering sharing your home with a lodger or renting out a room, it’s important to understand the difference between this and full subletting. For more on your rights and what’s allowed, see Sharing a Private Rental Property.
Understanding these key differences will help you stay within the rules and avoid potential problems with your shared ownership home.
Can You Rent Out a Shared Ownership Property?
Renting out a shared ownership property is not as straightforward as letting a home you own outright. Most shared ownership leases include strict restrictions on subletting. In general, you are expected to live in the property as your main home. This is because shared ownership schemes are designed to help people get on the property ladder, not to provide rental income.
Before considering renting out your shared ownership home, it’s essential to check your lease or shared ownership agreement carefully. These documents will set out whether subletting is allowed, and under what circumstances. In most cases, you will find that subletting the entire property is not permitted. There may be some exceptions, such as if you need to move temporarily for work or other serious reasons, but these are rare and always subject to approval.
If you think you have a valid reason to rent out your property, you must get written permission from your housing provider or landlord. This process usually involves explaining your situation and providing evidence to support your request. The housing provider has the right to refuse permission, and if they do grant it, they may set specific conditions or time limits.
Renting out your shared ownership home without the necessary permission can have serious consequences. You could be in breach of your lease, which may lead to legal action, including the risk of losing your home. It could also affect your relationship with your housing provider and make it harder to staircase or sell your share in the future.
For more detailed information on the terms and restrictions that apply to shared ownership leases, you can visit the Shared Ownership Leases – The Leasehold Advisory Service. If you are interested in broader issues around sharing and renting property, you may also want to read about Sharing a Private Rental Property to understand your rights and responsibilities in different rental situations.
Getting Permission to Let Your Shared Ownership Property
Before you can rent out a shared ownership property, you must get written permission from your housing provider. This is usually a housing association or local authority that co-owns your home with you. Most shared ownership agreements include strict clauses about subletting, so it’s important to follow the correct process.
How to Request Permission
Start by contacting your housing provider directly. You can usually do this by phone, email, or through their online portal. Ask about their policy on subletting and request an application form or written guidance. Make sure you keep a record of all correspondence for your records.
Information You May Need to Provide
When you apply for permission, you’ll likely need to provide:
- The reason you want to let out your home (for example, a temporary job move or financial difficulty)
- Details about the potential tenant(s)
- The proposed rental period
- Evidence that you will continue to meet your obligations, such as paying your share of the rent and service charges
Some providers may also ask for proof that your mortgage lender agrees to the arrangement, if you have a mortgage on your share.
Typical Conditions and Limitations
Housing providers rarely allow subletting on a long-term basis. Permission is usually only given in exceptional circumstances, such as needing to move temporarily for work or family reasons. Common conditions include:
- Subletting for a limited time only (often 6–12 months)
- Providing a copy of the tenancy agreement with your tenant
- Continuing to pay all charges and maintain the property
- Not charging your tenant more than your own costs
If you sublet without permission, you could be in breach of your lease. This can lead to legal action or even losing your home.
Timeframes for Approval
The time it takes to get a decision varies between housing providers. Some respond within a few weeks, while others may take longer if they need more information. It’s best to apply as early as possible and follow up if you don’t hear back within their stated timescales.
If you’re considering letting out your shared ownership property, it’s also helpful to understand the rules that apply to renting in general. For more on this, see our section on Sharing a Private Rental Property.
Your Responsibilities as a Landlord of a Shared Ownership Property
If you rent out a shared ownership property, you take on a range of important legal and practical responsibilities. These go beyond simply finding a tenant. You must comply with your shared ownership agreement, landlord law, and the rules set by your housing provider.
Maintaining the Property
As a landlord, you are responsible for keeping the property in good repair. This includes fixing any issues with heating, plumbing, or electrical systems, as well as maintaining the structure and exterior. Your housing provider may also have specific standards you must meet. Failing to maintain the property could lead to penalties or even loss of your permission to let.
Managing Tenancy Agreements and Deposits
You must provide your tenant with a written tenancy agreement that clearly sets out the terms of their tenancy. This protects both you and your tenant if disputes arise. If you need help creating a compliant agreement, you can find useful rental and lease agreement templates online.
When you take a deposit from your tenant, you are legally required to protect it in a government-approved tenancy deposit scheme. This ensures the deposit is safe and can be returned fairly at the end of the tenancy.
Complying with Health and Safety Regulations
Landlords have strict legal duties to keep their properties safe. This includes carrying out annual gas safety checks, ensuring electrical systems are safe, and providing smoke and carbon monoxide alarms. You should also check for hazards such as damp, mould, or faulty appliances. For a full list of your safety responsibilities, see the official GOV.UK guidance for landlords.
Paying Rent and Service Charges to the Housing Provider
Even while your property is let, you remain responsible for paying any rent or service charges due to your housing provider. These payments are separate from the rent you collect from your tenant. Make sure you keep up with these payments to avoid breaching your shared ownership agreement.
Understanding Your Legal Obligations
Letting out a shared ownership property means you must follow all relevant landlord laws. This includes giving proper notice to end a tenancy, protecting your tenant’s rights, and following eviction rules. The main law covering landlord and tenant relationships is the Housing Act 1988. It’s important to understand how this applies to your situation.
If you are new to being a landlord, or want to check you are meeting all your obligations, you can find further guidance on landlords’ responsibilities and rules.
For more general advice on renting out property, including steps to take before letting and common pitfalls to avoid, see our guide to Renting Out Your Property.
Steps to Take Before Renting Out Your Shared Ownership Home
If you’re considering renting out your shared ownership property, it’s important to follow the correct steps to avoid breaching your agreement. Here’s what you need to do before letting your home.
1. Check your shared ownership lease for restrictions
Your lease is the main document that sets out what you can and cannot do with your property. Most shared ownership leases include clauses that restrict subletting. In many cases, you are not allowed to rent out your home unless you have bought 100% of it (known as “staircasing”). Some leases may allow subletting in exceptional circumstances, such as a temporary job relocation. Read your lease carefully and look for any clauses about subletting or letting the property.
2. Contact your housing provider to discuss your plans
Before taking any action, speak to your housing association or provider. They can tell you whether renting out your home is possible and what conditions apply. You will usually need to request formal permission in writing. Be prepared to explain your reasons for wanting to let the property and provide supporting documents if needed. Remember, letting without permission is a breach of your lease and could put your home at risk.
3. Understand the type of tenancy you can offer
If you are granted permission to let your shared ownership home, you must set up the right type of tenancy agreement. Most private landlords use an assured shorthold tenancy (AST). However, your lease or your housing provider may require a specific type of agreement or impose limits on tenancy length. Make sure you understand your legal obligations as a landlord, including safety checks, deposit protection, and tenant rights. For more on your responsibilities, see House Sharing.
4. Prepare the property for tenants
Getting your home ready to rent involves more than just cleaning. You’ll need to ensure the property meets safety standards, such as having working smoke alarms, safe gas and electrical systems, and an up-to-date Energy Performance Certificate (EPC). Consider whether you’ll let the property furnished or unfurnished, and carry out any necessary repairs to avoid issues for your tenants later.
5. Consider insurance implications
Standard home insurance may not cover you if you rent out your property. Speak to your insurer and let them know about your plans. You may need to switch to landlord insurance, which provides cover for risks such as property damage, loss of rent, and liability claims. Failing to update your insurance could mean your policy is invalid if you need to make a claim.
By following these steps, you can help ensure that you comply with your shared ownership agreement and protect both your property and your interests as a landlord.
Alternatives to Renting Out Your Shared Ownership Property
If you’re considering alternatives to renting out your shared ownership property, there are several routes you can explore. Each option has its own pros, cons, and legal considerations. Here’s what you need to know before making your decision.
Selling Your Share
One alternative is to sell your share in the property. This is often the most straightforward option if you no longer want to live there or can’t rent it out. Most shared ownership schemes include a process called “staircasing,” which means you can sell your share back to the housing association or on the open market, depending on your agreement.
Selling your share can free up your investment and may be quicker than seeking permission to rent. However, you’ll need to follow the terms set out in your lease, including offering the property to the housing association first (a process known as “first refusal”). If you’re interested in this route, check your lease for any restrictions and speak to your housing provider for guidance.
Increasing Your Ownership Share (Staircasing)
Another option is to increase your share of ownership, potentially up to 100%. This process, known as staircasing, allows you to buy more of your home over time. Once you own the property outright, you’ll have more flexibility, including the freedom to rent it out without the same restrictions that apply to shared ownership properties.
Keep in mind that staircasing involves additional costs, such as valuation fees, legal expenses, and possibly higher mortgage payments. However, it can give you greater control and open up more options for letting or selling in the future.
Renting to the Council or Private Tenants
Some shared owners look into renting their property to the local council or to private tenants as alternatives. These options may be available in limited circumstances and usually require permission from your housing provider. Renting to the council often means your home is used for social housing, while renting to private tenants follows standard letting rules.
To learn more about what’s involved in renting out to private tenants or renting out to the council, see our dedicated guides. They cover the steps, benefits, and potential challenges of each approach.
Comparing Your Options
Choosing the best alternative depends on your situation. Selling your share is ideal if you want to move on completely. Staircasing works if you want more control and flexibility. Renting to the council or private tenants may suit those looking for a temporary solution, but permissions and restrictions apply.
If you’re considering using a letting agent or want to compare other renting options, you may also find our section on renting through a letting agent: your rights, fees and key advice helpful.
Before making any decisions, review your lease agreement, speak with your housing provider, and consider seeking independent legal advice to ensure you understand all your rights and obligations.
Where to Get Help and More Information
Renting out a shared ownership property can be complex, and it’s important to get the right support. Here’s where you can find help and further information to guide you through the process.
Contact Your Housing Provider
Your first step should always be to speak with your housing provider or housing association. They can explain the specific rules that apply to your property and outline the process for requesting permission to let your home. Many providers have dedicated teams to answer questions and support shared owners. You can find contact details and support options through resources like Contact Us | HUD.gov / U.S. Department of Housing and Urban Development (HUD).
Seek Legal Advice If Unsure
If you’re unsure about your rights or the terms of your lease, consider seeking independent legal advice. A solicitor with experience in housing law can help you understand your obligations and avoid potential breaches of your agreement. This is especially important if you are facing complex situations, such as disputes with your housing provider or changes in your circumstances.
Useful Government and Housing Association Resources
There are several government and housing association resources available to help you navigate shared ownership letting rules. These resources can provide guidance on topics such as tenancy management, your responsibilities as a landlord, and what to do if your situation changes. For example, if you want to learn more about managing tenancies, Council Tenancy Management offers practical advice for both tenants and landlords.
If you’re thinking about using a letting agent to manage your property, make sure you understand your rights and any fees involved. You can find more information in Renting Through a Letting Agent: Your Rights, Fees and Key Advice.
If your circumstances change and you need to move out, you may also want to know when the council must help with rehousing. For more on this, see When the Council Must Rehouse You: Main Housing Duty.
How Contend Can Help
If you have questions about renting out your shared ownership property, Contend’s AI Legal Assistant can provide clear, personalised answers tailored to your situation. Contend can guide you through the next steps, help you understand your legal rights, and even assist in drafting letters or documents to communicate with your housing provider. Whether you need advice on getting permission to let, understanding your tenancy agreement, or managing your responsibilities as a landlord, Contend is here to support you every step of the way.
