Right to Shared Ownership: buying a share of your rented home
Paying rent
For a shared ownership home, you need to pay rent for the share you do not own.
You may lose your home and the money you put into it if you do not pay your rent or you break the terms of your lease.
The landlord will review and increase your rent each year. There are limits to how much rent the landlord can charge you.
Rent limits
The rent limit is 3% of the value of the share you do not own. Most landlords charge 2.75%.
Example
The table shows how much the rent might be for a home valued at £400,000 and a home valued at £200,000.
| Home 1 | Home 2 | |
|---|---|---|
| Total value of the home | £400,000 | £200,000 |
| Your share (40% of the total) | £160,000 | £80,000 |
| Remaining share (60% of the total) | £240,000 | £120,000 |
| Rent for the first year (2.75% of remaining share) | £6,600 | £3,300 |
| Your monthly rent | £550 | £275 |
Rent review
The landlord will review your rent at the times set out in your lease. This is usually once a year.
Your rent will go up when it is reviewed. It will not go down.
How much your rent can go up depends on the date you signed your lease.
If you signed your lease before 12 October 2023
The most your rent can go up by is the percentage increase in the Retail Prices Index (RPI) for the last 12 months plus 0.5%. This means that if the RPI increase for the 12 months is 0% or negative, the most your rent can go up by is 0.5%.
Example
Your rent is £360 a month. On your rent review date, the RPI increase over the last 12 months is 4% so your rent could increase by 4.5% (4% plus 0.5%). This means your rent could go up to £376.20 a month.
If you signed your lease on or after 12 October 2023
Check the terms of your lease to see how much your landlord can increase your rent by. It will be either:
- the Retail Prices Index (RPI) plus up to 0.5%
- the Consumer Prices Index (CPI) plus 1%
If your rent increases in line with the CPI, the most your rent can go up by is the percentage increase in the CPI for the last 12 months plus 1%. If the CPI increase for the 12 months is -1% or below, your rent can be held at 0%.
Example
Your rent is £550 a month. On your rent review date, the CPI increase for the last 12 months is 2.1%, so the most your rent could increase by is 3.1% (2.1% plus 1%). This means your rent could go up to £567.05 a month.
If you buy more shares
The amount of rent you pay will be based on the share you do not own. If you buy more shares, you’ll pay less rent on the rest of the property.
Example
You have a 40% share and pay the landlord £360 a month in rent on the remaining 60%. You buy another 30%, so you now have a 70% share of the home.
The remaining share is now 30% - half as much as before. This means your rent is also half as much as it was. It is £180 instead of £360.