The New Model Shared Ownership Lease
The differences between the old model lease and the new
The New Model Shared Ownership Lease Explained
In September 2021, the Government announced changes to the Shared Ownership scheme. These changes include:
- The minimum initial share a customer can buy in a new property being reduced to 10% from 25%
- A new 10 year repair warranty, during which the Shared Owner will receive support from their landlord towards the costs of essential repairs to their home
- The introduction of a new staircasing model, enabling shared owners to buy additional shares in their home in lower instalments (from as little as 1%), with reduced costs
- The nomination period (which is the time the landlord is granted sole rights to market and find a buyer for the property), being reduced, to allow shared owners to have more control when selling their home
As a result of these change some customers will be on the old model lease and some will be on the new model lease.
Key Differences
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Old Model Lease |
New Model Lease |
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Minimum initial share available to buy is 25% |
Minimum initial share available to buy is 10% |
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Additional shares can be brought at a minimum of 10% |
Additional shares can be brought at a minimum of 1% for the first 15 years of occupancy |
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Costs of repairs and maintenance are covered by you, the shared owner |
For the first 10 years from the lease commencement date, the costs of repairs and maintenance are covered by Alliance Homes |
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When selling your home, there is a nomination period of eight weeks for Alliance Homes to market and find a buyer for your home |
When selling your home, the nomination period is reduced to four weeks |
Am I on the old model lease or the new model lease?
If you bought your shared ownership home from Alliance Homes before March 2023, then you will be on the old lease and will not be affected by the changes. If you bought your Shared Ownership home after March 2023 then your home may be on the old lease or the new lease. If you are unsure, please ask a member of our friendly sales team.
How will the changes affect me if I choose to sell my home?
Your nomination period (which is the timeframe we are granted sole rights to market and find a buyer for your property) will end after four weeks, rather than the eitght weeks on the old model lease. If after four weeks of marketing, we haven’t nominated a buyer for your property, you can choose to sell your home on the open market if you wish.
How will the changes affect me if I wanted to buy more shares/staircase in my home?
The changes now give you the option to purchase additional shares in your home in as little as 1% increments for the first 15 years. During those first 15 years, once a year, we will send you Land Registry’s House Price Index (HPI) valuation for your property. After this 15 year period, the minimum amount you can staircase by changes to 5% of the open market value, rather than the previous 10% on the old lease model, and the cost of the additional shares will be determined by a RICS valuation.
What is the new 10 year repair warranty?
The 10 year ‘initial repair period’ begins from your lease start date and applies while you own less than a 100% share in your home.
The new repairs warranty is designed to help bridge the gap between renting and home ownership. The changes aim to prevent you from being hit with unexpected repairs and maintenance bills in the initial years and to help you to put money aside towards buying more shares in your home.
In the initial 10-year repair period, you’ll be able to claim costs of up to £500 a year from Alliance Homes to help with some essential repairs if the following items that were present when you first moved into your home become faulty:
- All water pipes (everything from your external stop tap onwards)
- All plumbing fittings such as taps, waste pipes and traps
- Blocked drains (please note – if drain blockages are caused by inappropriate disposal of eg fats, wet wipes, the clearance costs will not be reimbursed)
- All gas pipes (everything from the gas meter onwards)
- All electrical faults (everything from your electric meter onwards but excluding any costs related to electrical testing)
- All repairs to baths, showers, sinks and toilets
- All repairs to water heaters (excluding servicing costs) assuming they were present when you purchased your home
- All repairs to gas boilers (excluding servicing costs)
- All repairs to electrical heaters (excluding servicing costs)
- All repairs to ground and air source heat pumps (excluding servicing costs)
- All repairs to PV panels (if applicable)
- All repairs to the heating/ventilation system (if applicable)
Please note that repairs required because of deliberate or negligent damage will not be covered under this 10 year repair warranty.
You will have the flexibility to ‘roll over’ a maximum of 1 years’ worth (£500) of unused repairs expenditure into the following year.
You will not be able to reclaim costs for a report or replacement any of the above due to improper use. Health and safety requirements (e.g boiler servicing and electrical testing) will also remain your responsibility. You will still be responsible for the general upkeep and maintenance of your home and for paying any service charges, and registering any warranties for new appliances within your home – e.g. oven and hob warranties.
If you break the terms of your lease, we have the right to refuse to pay for the repair. For example, if you cause damage on purpose or do not keep up with routine servicing and maintenance, such as regular boiler servicing.
How do I make a claim for essential repairs under the new 10 year repair warranty?
If you discover a repair that’s needed in your new home, you will need to arrange for it to be fixed by a Trustmark-approved tradesperson, and then claim the cost (up to the value of £500 for each year of the first ten years of ownership), back from us.
If you want to make a claim, please contact the Alliance Contact Centre on Tel: 03000 120 120 who will be happy to advise and assist you.