Published 07 Apr 2019
Can I sublet a Shared Ownership Property?
Shared Ownership is an affordable housing product designed to help first time buyers who can't afford a property on the open market, get a foot onto the property ladder.
With this in mind, subletting is not allowed under the terms of a Shared Ownership lease, unless there are exceptional circumstances.
Subletting can be defined as the process of a leaseholder entering into a rental contract with another party to rent and live in the home owned by the leaseholder.
What if I need to move but cannot sell - can I sublet then?
You may have seen stories in the press recently about shared owners who need to move due to personal / professional circumstances and - unable to sell their property - end up paying for an empty Shared Ownership home whilst renting elsewhere.
In practice, if you find you need to move to a different property and don't wish to continue to pay for a property standing empty you have two options: staircase to 100% after which subletting restrictions don't apply, try to sell your shared ownership property, or ask for a permission to sublet.
Option 1: Staircase to 100%
Once you've staircased to 100% you own the property outright and can sublet it to whomever you wish. You'll still need to inform your housing association as well as you mortgage provider as this will change the terms of your mortgage. You'll also need to look into taking out appropriate insurance to provide enough cover for you and your tenants.
Find out more: For more information about buying more shares in your Shared Ownership home, read about 'Staircasing'.
Option 2: Sell your Shared Ownership home
Selling your Shared Ownership property is not half as difficult as some journalists would have you believe - especially in London where the property market is particularly robust.
As a shared owner, you will be obliged to give the housing association you bought your home from a minimum of eight weeks to try to sell your home. This is because your Shared Ownership home came from affordable housing stock and it's important that it gets passed on to somebody who is also eligible for the Shared Ownership scheme.
This is a benefit to you as a seller rather than an obstacle. We have thousands of potential Shared Ownership buyers registered with us, waiting for suitable properties to become available on the re-sale market. In fact, our success rate is exceptionally high with 98.8% of re-sales sold during the eight-week nomination period.
Find out more: How do I Sell my Shared Ownership Home
Option 3: Ask for permission to sublet
Your last option is to apply to the housing association you purchased your home from for special permission to sublet. For Peabody, newer leases have an absolute prohibition on sub-letting until 100% stair-casing, however if you have an older lease there may be some flexibility in exceptional circumstances. Please contact us to look at the terms of your individual lease to see what is permissible.
Subletting and Insurance for Shared Ownership homes
Shared Ownership Homes should only be used as a main residence for the resident and as such are covered by appropriate insurance. All Peabody Homes are covered by the buildings' insurance, with home owners encouraged to take out additional contents insurance to cover their personal possessions.
The building insurance and the contents insurance are only valid for the named policy holder. This means that should anything happen, not only will tenants subletting not be covered, but also any loses to your own possessions will also not be covered as your contents insurance is likely to be declared void once the insurance company finds out you've been subletting your home.
Want more information about Shared Ownership?
If you want to find out more about how Shared Ownership works, take a look at our Shared Ownership information pages using the link below. You can also use our property search if your ready to start searching for your ideal home.Find out more about Shared Ownership