You are here: Home - Mortgages - Buy To Let - News -

Will it get easier for shared owners to sublet their homes?

0
Written by: Emma Lunn
13/01/2022
The government says it is taking steps to make it easier for shared owners affected by building safety issues to sublet their homes.

Shared ownership involves buying between 25% and 75% of a property and paying rent on the remainder, which is owned by the local housing association.

However, shared owners are responsible for 100% of the maintenance costs of a property, including service charges and major works bills levied by the freeholder. 

Thousands of shared owners have received six-figure bills to pay for remedial work to make their homes safe after the Grenfell Tower fire.

Shared ownership homes sold through the Affordable Homes Programme restrict subletting in all but ‘exceptional’ circumstances. The government says this restriction is in place to prevent homes built with public funds from being used for commercial gain.

But ministers have now amended its grant funding guidance to make it clear that issues of building safety should be treated as an exceptional circumstance. This will allow shared owners to sublet their homes, with the agreement of their freeholder.

However, in order to sublet their homes, shared owners also require the permission of their mortgage lender. Christopher Pincher MP, minister for housing, has written to mortgage lenders encouraging them to accept subletting applications from affected shared owners.

The letter said: “To help facilitate subletting requests from shared owners, I would strongly encourage you to extend the period in which they can let out their property before converting to a buy-to-let mortgage, otherwise known as the consent-to-let period. This will save shared owners money they otherwise would have had to pay to convert their mortgage. 

“As households living in affordable housing, I would also ask that you waive the annual 1% premium for shared owners who choose to sublet over the course of their consent-to-let period.” 

The news follows an announcement by housing secretary Michael Gove earlier this week in which he told developers to pay for the cladding crisis.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week