Government clarifies subletting rules for shared owners facing building safety issues

The government has claimed shared owners who are unable to sell their homes due to building safety issues should be allowed to sublet their properties.

Shared ownership leaseholders are people who have bought a share of their home through a shared ownership scheme while paying rent on the remaining share owned by a housing provider.

In some circumstances, they may seek to sublet their property, which means renting it out to a tenant.

Subletting should always be permitted by landlord

In a written Parliamentary question, Labour MP Jonathan Davies asked what steps the government is taking to support those in shared ownership properties who are unable to sell their property.

Housing minister Matthew Pennycook said: “The government recognises that some shared ownership leaseholders face difficulties selling their homes, especially where building safety issues are present.

“We have taken steps to support shared owners who find themselves in such a position, including making clear that where building safety issues exist, subletting should always be permitted by the landlord.

“Landlords have the option to buy back homes where shared owners are unable to sell due to building safety issues, and they can use their own resource or Recycled Capital Grant Funding to do so.

“Shared ownership providers are independent bodies, and decisions about the management, sale or repurchase of individual homes sit with them.”

No current plans to introduce a mandatory buyback scheme

He added: “While buyback provisions already apply in some limited circumstances, such as in Designated Protected Areas or where providers offer discretionary support in exceptional cases, the government has no current plans to introduce a mandatory buyback scheme for all shared ownership homes.

“The new Social and Affordable Homes Programme places new expectations on shared ownership providers to improve customer experience. These include giving greater consideration to long-term customer affordability and increasing transparency and fairness on costs.”

The news comes as the government has announced exemptions for shared owners who are subletting under the Renters’ Rights Act.

New government guidance published reveals shared owners may be exempt from the 12-month no-re-let restricted period under the act.