The Business Legal Services Blog

Guest blog: Streamlining the resale of shared ownership properties

On 31 January 2015, the Department for Communities and Local Government (DCLG) and the Homes & Communities Agency (HCA) launched a consultation on proposals to streamline the resale of shared ownership properties to make it quicker and easier to sell them.

Current law

Shared ownership leases include a pre-emption right where the housing provider can nominate a subsequent purchaser. This currently applies to both current and former shared ownership homes which can be 100% staircased. This right remains for 21 years after the householder has 100% staircased.

If a shared ownership household wants to sell their home, they must gain consent of their housing provider to assign the lease.

For the consent to be granted, the intention to sell must be expressed in writing.

The housing provider then has 8 weeks to decide whether it wants to nominate itself or another purchaser to acquire the interest in the lease. After this, the home can be put on the open market.

The Consultation

Pre-emption right

There were strong views in the consultation that the pre-emption right played a vital role in retaining affordable home ownership properties for those that needed them.

Some considered that the right was “burdensome and placed restrictions on how properties were used, and should be removed entirely”.

A significant amount of those responding to the consultation supported the removal of the right from any future and existing properties which are 100% staircased.

The eight week nomination period

The consultation asked for views on:

(1) whether to reduce the period from 8 weeks to 4 weeks, and

(2) whether the home can be marketed at the time of consent being requested (concurrently) after the nomination period (sequentially)

(1) the general consensus was that to reduce the nomination period would hamper the time to find “suitable eligible purchasers”. Further, many providers argued that they can already chose to dispense with the 8 week period or operate on a shorter period.

(2) The main concern raised in consultation is that to market the home concurrently would permit the home to be sold to a provider when they are of the belief that the home to be freely available on the market. This would beg the question of which party has priority and will inevitably complicate the process.

Streamlining the process

The consultation sought views on other proposals for streamlining the process of selling shared ownership houses.

The following ideas were put forward:

• Reviewing, standardising and rationalising of documentation
• Purchase back of shares from those in higher share levels so properties can be marketed as more affordable
• Availability of lending for prospective purchasers
• Assignment or trading of the lease rather than sale
• Publication of a guide
• Existing shared owners qualifying for new shared ownership without the need for local authority approval
• Extending the standard 99 years to 125 years to encourage lending
• Creating a legal definition of shared ownership in statute


• The Government have decided not to apply the proposed changes to the nomination period for shared ownership. Therefore, the 8 week period remains.

• The HCA will amend the model leases and guidance for future shared ownership properties to remove the pre-emption right following 100% staircasing and amend guidance to recommend providers to remove the pre-emption right following 100% staircasing, for existing shared ownership leases.

• The Government will undertake a review of shared ownership to focus on possible longer term options for change.


In light of the consultation, the Government have suggested that further reviews need to be undertaken and that further changes will come into effect in the Spring of 2015.

Watch this space!

1 thought on “Guest blog: Streamlining the resale of shared ownership properties

  1. hi,
    I am very confused about my situation with regard to my shared ownership property.
    I currently own 100% share of my house, the house has been bought under the shared ownership scheme, where I initially owned 50%. In February 2015, I purchased the remaining 50%, thus owning 100% and the freehold was automatically transferred to me.
    I am looking to sell this property and move on, however, the land registry document and the lease has a clause about the right of first refusal, now that the government has changed the “rules”, do I still have to honour that clause in the lease? and will the land registry deed also change to reflect what the government has decided?
    I am not sure how to implement the changes to my lease and the registry documents, please could someone advise me. thank you

Leave a Reply

Your email address will not be published. Required fields are marked *