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

Written by: Emma Lunn
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.

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