Can you rent out a shared ownership property?

Holmes & Hills shared ownership solicitors take a look at if you can rent out a shared ownership property, and the reasons you may be able to sublet a shared ownership home.

The Shared Ownership Scheme was implemented as a means to assist people to owning their first property by allowing them to purchase a ‘share’ of the property and pay Specified Rent (that is a rental amount based on the unacquired share) to the Housing Association who will retain a superior interest in the property. As a result, the scheme was not intended to be used as a means to assist people in purchasing properties and renting them out in order to make a profit.

As a result, being the owner of a Shared Ownership Lease generally does not give you an automatic right to sublet or rent out your property. In exceptional personal circumstances your Housing Association may provide you with permission to rent out the property.

N.B It is worth noting that should you also have a mortgage secured against the property, consent to rent out or sublet the property will also need to be obtained from your mortgage lender. Your Lender may require you to change your mortgage product from a residential mortgage to a Buy-to-Let mortgage for the term of the letting, and likewise you may be required to change the product back to a residential mortgage when the tenancy ends so you remain compliant with the terms of your Mortgage Offer.

So, can I rent out my shared ownership home?

There are several scenarios which may give the Housing Association good cause to allow you to rent out the property. These can range from having a temporary contract to working abroad to having medical needs or needing to provide care for a relative whereby it may not be convenient to live in the property. There is no set of scenarios in which the Housing Association are bound to provide consent to sublet the property (subject to any specific clauses contained within the Lease).
In any event the reasoning and explanations will need to be provided to the Housing Association and they will assess the situation on a case-by-case basis. If the Housing Association agree to allow you to rent out the property they will want details of who the property is being let to, any agents details (if you choose to employ an agent) and a copy of the proposed Tenancy Agreement to agree the terms in which the property is to be let for and at what cost. Upon review of this information they will provide you with written consent to ensure you have complied with the terms of the Lease and that the Housing Association are aware that you will not be residing in the property.

Subletting shared ownership

In accordance with the majority of the shared ownership leases, the Housing Association will most likely only consider the option of you subletting the entire property to a tenant, they will likely not grant you permission to sublet part only of the property (for example if you have a spare bedroom at the property).

If subletting consent is to be granted by the Housing Association you should make yourself aware of the additional responsibilities placed upon you, being the Landlord for the letting arrangement between yourself and the tenant. You may want to consider taking separate legal advice in regard to your obligations as being the Landlord as you will still be responsible for the property under the terms of your lease regardless of whether the property is sublet or not.

You should also be aware of any additional costs or tax implications that subletting a property can incur. We would recommend you speak to a tax specialist in regard to these matters before deciding whether to proceed.