Shared Ownership is Just Like Renting – You’ll Never Have Stability

There’s a common misconception that Shared Ownership offers no more stability than renting because you still pay rent on part of the property. However, this myth overlooks the fact that Shared Ownership is a form of homeownership, providing far greater stability than traditional renting. Let’s explore why this belief doesn’t reflect the reality of Shared Ownership—especially in today’s challenging rental market.

According to government data, over 5,500 households staircased to 100% ownership in the year 2022 – 2023. That promising figure shows that shared ownership offers a clear path to full ownership.

Understanding the Stability Myth

The confusion often arises because Shared Ownership involves paying rent on the portion of the home you don’t yet own. This leads some to assume it’s similar to renting, where tenants rely on landlords and face uncertainty around lease renewals and rent increases. While it’s true that Shared Ownership includes a rental element, it’s fundamentally different from renting.

The Truth: Shared Ownership Provides the Stability of Homeownership

Shared Ownership offers the security of homeownership even while you’re still paying rent on a portion of the property. As a Shared Ownership buyer, you are a homeowner—not a tenant—which means you have much greater control over your living situation. You are responsible for the maintenance and upkeep of your home, and mortgage payments (if applicable) just as any homeowner would be.

Why Shared Ownership is Not Like Renting

Unlike renting, Shared Ownership gives you the rights and responsibilities of a homeowner. You can make changes to your property (within the terms of the lease) and enjoy the security of knowing that you have a long-term stake in your home. Most New build Shared Ownership come with long leases, lasting 199 years, providing stability for as long as you wish to stay.

In contrast, private rental prices in the UK have surged over the past year, making renting increasingly uncertain. According to the Office for National Statistics (ONS), rental prices in the UK increased by 5.3% in the year leading up to July 2023—the highest annual growth rate since the ONS began recording this data in 2006. This sharp rise adds considerable pressure to tenants, who face the risk of further rent hikes or being priced out of their homes altogether.

Shared Ownership, on the other hand, offers a more stable alternative, with rent typically set below market rate. Be aware however that under the terms of your Shared Ownership lease, your rent will periodically be reviewed annually. The amount your rent increases is defined in your lease and can be either determined by the Retail Price Index (RPI) plus half (0.5%) or the Consumer Price Index (CPI) plus (1%). You should familiarise yourself with the rent review as set out in your lease, and consider purchasing further shares (staircasing) when possible to reduce the amount of rent payable.

How the Rent Element Works in Shared Ownership

While you do pay rent on the part of the property you don’t yet own, this rent is usually below market rate. More importantly, paying rent does not compromise your rights as a homeowner. Unlike a tenant, you have more control over your home and your future in it. Your housing provider manages certain aspects of the property, but you retain full responsibility for your home, including decisions about its décor and improvements, so get those working on those Pinterest boards! Please note that you are responsible for all repairs to your property unless it is covered in the defect period or warranty.

You may also pay a service charge on top of rent. This is a separate cost and should be factored into your budget. Once you staircase to 100% ownership, service charges will still apply.

That said, there are some areas where you may need to seek permission—such as making major alterations or extensions—so it’s worth checking your lease or contacting Love Living Homes to request permission.

Staircasing: The Path to Full Ownership

One of the key benefits of Shared Ownership is the ability to Staircase, which allows you to gradually purchase additional shares of your home until you own it outright. As you buy more shares, the rent you pay decreases, and once you own 100%, you no longer pay rent at all, however service charges may still apply. This provides a clear pathway to full homeownership, allowing you to secure even more stability over time.

Check your lease and find out what staircasing options are available to if this is possible for you, or visit our guide to staircasing Staircasing | Love Living Homes

Stability and Security Through Shared Ownership

Shared Ownership provides long-term security. Unlike renters, who may face lease renewals or the possibility of eviction, Shared Ownership homeowners have the assurance that they can stay in their home as long as they meet the terms of their lease and keep up with their mortgage payments (if applicable). The risk of being asked to leave simply does not apply in the same way it does for tenants in rented properties, unless you have a mortgage and do not keep up your mortgage payments.

Flexibility on Your Terms

Shared Ownership also offers flexibility. You have the option to increase your share of the property when it suits your financial situation. Even if you don’t staircase to full ownership, your long lease gives you the stability to stay in your home for as long as you wish. This flexibility ensures that Shared Ownership remains a stable and adaptable solution for a wide range of buyers.

Debunking the Myth: Shared Ownership is Secure Homeownership

While it’s true that Shared Ownership involves paying rent on the portion of the home you don’t yet own, this does not diminish the stability and security that comes with being a homeowner. Shared Ownership offers a long-term, secure living arrangement where you enjoy the rights and responsibilities of homeownership. Moreover, it provides the option to gradually increase your stake in the property through staircasing, giving you a clear path to full ownership over time. This flexibility ensures that you can tailor your journey to full homeownership according to your financial situation, without compromising your stability in the meantime.

Stability and Security in Shared Ownership

In summary, Shared Ownership is not just a stepping stone into the property market—it provides long-term stability and security, much like traditional homeownership. While there is a rental element, it does not compromise the control or rights that come with owning your home. Shared Ownership offers a reliable, affordable way to become a homeowner, free from the uncertainties that renters face—especially in today’s climate of rising rental costs.

If you’re looking for a stable, secure way to enter the housing market, Start your Shared Ownership journey with us and enjoy the stability and security of owning your own home