The New Shared Ownership Lease Model

The government has introduced a New Model Shared Ownership Lease, to improve the experience of some current leaseholders and to help even more people get on the housing ladder. 

As a shared ownership customer, you part own and part rent your home. As a result, you are subject to a lease outlined by us as your landlord. 

Frequently Asked Questions

A lease includes all the information on responsibilities you have as a leaseholder. For example, who is responsible for repairs, how long you have the lease for and whether you can increase your home ownership share.

The new model works in much the same way as before, but with a few changes, including:  

  • The minimum initial share that can be purchased of a home is now 10%  
  • The introduction of the option of staircasing in 1% increments for the first 15 years 
  • The introduction of a 10-year period during which the cost of £500 per year for any essential maintenance or repairs will be covered by us as your landlord 
  • Each home will be provided with a 990-year lease. 

The new lease applies to all Shared Ownership homes delivered through Homes England’s Affordable Homes Programme between 2021 and 2026. 

This includes Home Ownership for people with long-term disabilities (HOLD), Older Persons Shared Ownership (OPSO), homes purchased through the Right to Shared Ownership, homes in rural locations and Designated Protected Areas.  

If you are unsure if the new lease applies to your home you can contact our Leasehold team team via email leasehold@karbonhomes.co.uk. They will be able to confirm your eligibility, and what lease applies to your home.

Updates to the New Lease

The below dropdown boxes contain information relating to the ways in which the new lease model for shared ownership is different to the previous model.

Previously, the minimum initial share of a home you could purchase through shared ownership was 25%. This has now decreased to 10%. The intention of this reduction is to allow even more people to access affordable homeownership.  

New properties have a set time period within which we as your housing provider must fix defects, both external and internal – this is usually 12 months. This is called the out of defects period.  

The 12 month period starts from when the builder hands over the property to us, not from when you as a customer receive the home.   

As a leaseholder, you now are entitled to a ten-year initial repairs period. This means that you can claim up to £500 per year for any essential maintenance internally to your home for the first 10 years of your lease. Karbon are also responsible for any external repairs.  

Unlike the out of defects period, the initial repairs period starts from when your lease begins.  

Repairs covered by the period include those for essential fixtures and fittings that shouldn’t be faulty in a new home.

 

External and Structural Repairs  

During the IRP, Karbon is responsible for procuring and paying for external and structural repairs to your home as a leaseholder. These repairs would include works to:  

  • The load bearing framework of the home  
  • The external fabric of the home 
  • The service media forming part of (but not exclusively serving the premises)  
  • All other structural part of the premises such as the roof, foundations, joists and external walls  

Any works that are covered by a guarantee or warranty will be claimed for through the relevant policy by the policyholder. You as the leaseholder are responsible for notifying Karbon that a repair is required.  

Once the IRP has passed and any applicable guarantee or warranties have expired, you as the leaseholder will be fully responsible for any repairs and will be liable for all costs regardless of your share in the property.  

Where leases permit advance payments of service charges to fund future major repairs, these will be held in trust in something called a separate sinking fund. 

A sinking fund refers to money/funds set aside over a period of time for a specific future use, in this case major repairs.  

These sinking funds will be collected from the outset of a shared ownership lease for any major repairs expected from year 10 of the lease onwards, to ensure sufficient future provision for major works. Any funds collected within the first 10 years of the lease will not be used for any applicable IRP repairs.  

 

Internal Repairs  

As a NMSO (new model shared ownership) leaseholder you are responsible for general repairs to your home internally in the same way as any other leaseholder.  

Through the IRP Karbon will support you with the cost of unexpected essential repairs up to the value of £500 per year for the first 10 years of your lease. These are referred to in the lease as ‘Qualifying General Repairs and Maintenance Works’. This contribution is for essential repairs or replacement (if faulty) of:  

  • Installations in the home for the supply of water, gas and electricity – including basins, sinks, baths and sanitary devices – pipes an drainage. Fixtures, fittings and appliances for making use of the supply of water, gas or electricity (such as ovens or washing machines are not included).  
  • Installations in the home for space heating and water heating  

Any repairs falling under the definition of Qualifying General Repairs and Maintenance Works above must be notified to and approved by Karbon in advance of work being carried out. 

As a NMSO leaseholder you are then responsible for finding and paying contractors for any repairs, and are required to use Trustmark approved tradespersons.  

Claims for reimbursement from the £500 contribution must be made to Karbon Homes with evidence of the repair work and the cost. There is no limit to the number of claims that a leaseholder can make in any one year.  

If you do not claim the maximum £500 contribution in any one year, the unused balance will be rolled over to the following year (making the maximum balance that could be available in any given year £1,000, assuming £500 rolled over from the previous year). No further roll over of the contribution is applicable.  

If you use part of the contribution and claim for a repair that will exceed your remaining balance, you will be required to pay the remainder.  

 

Eligibility during the IRP  

The repair cover applies to new build (or newly converted) homes for the first 10 years of its life or until you acquire 100% ownership, whichever is sooner.  

If the home is resold through the shared ownership scheme within the 10 year period, any remaining years will be transferred to the new leaseholder.  

Any repair work caused by the leaseholders occupation or misuse of the property (including that of any tenants, visitors or others acting on the leaseholders’ behalf) will be your responsibility, even within the IRP. 

 

For further information on the new lease repairs please contact our Leasehold team via email leasehold@karbonhomes.co.uk.

If you decide you want to increase the amount of your home that you own, you can do this through a process called staircasing.  

This process already exists for shared ownership homes, but if your home applies to the new lease you can now increase your shares by a minimum of 1% for the first 15 years of your lease. You can also purchase larger shares, starting at 5%. 

For more information on staircasing visit here or contact sharedownership@karbonhomes.co.uk