# UK Shared Ownership — Law and the Lease *Personal knowledge base. Compiled 2026-05-16. British English. Not legal advice — confirm anything material with a conveyancer who specialises in shared ownership before you commit.* --- ## TL;DR - Shared Ownership (SO) is **not** part-buying a property. Legally you are a **leaseholder** holding a single long lease over the *whole* home, paying a premium for an "Acquired Percentage" share **and** rent on the unowned share to a Registered Provider (RP) landlord. This is true even for SO **houses** — you do not own the freehold of a house bought through SO. - The lease is built from a **government model lease** published by MHCLG/DLUHC and drafted by Trowers & Hamlins. There are distinct generations: pre-2015, 2016–2021 (typically 99/125-year term, full repairing), and the **2021 model lease** (990-year term, 10-year landlord repair contribution, 1% staircasing, shorter resale nomination, reformed rent review). [source: AHP 2021–2026 Standard Shared Ownership model leases — GOV.UK](https://www.gov.uk/government/publications/affordable-homes-programme-2021-to-2026-standard-shared-ownership-model-leases) - The biggest legal risk is structural: because part of your occupation is a **tenancy**, rent/service-charge arrears or breach can put the **entire home at risk via forfeiture** — historically magnified by the assured-tenancy "Ground 8" route. The Renters' Rights Act 2025 removed long SO leases from the assured tenancy regime from **27 December 2025**, which removes the Ground 8 route but leaves discretionary forfeiture and possession routes in place. [source: Shared ownership and the Renters' Rights Act — information note for registered providers — GOV.UK](https://www.gov.uk/government/publications/shared-ownership-and-the-renters-rights-act-letter-to-registered-providers-of-social-housing/information-note-for-registered-providers) --- ## Key legal risks (read this list) - **Forfeiture of the whole home for arrears/breach.** You can lose 100% of the property even though you "own" only a share. Your equity is not ring-fenced. [source: Shared interest — The Law Society Communities](https://communities.lawsociety.org.uk/june-2022/shared-interest/6002343.article) - **Historic Ground 8 (Housing Act 1988) risk on older leases / before 27 Dec 2025.** Mandatory possession for ≥8 weeks' rent arrears, no judicial discretion, no relief from forfeiture — far faster and harsher than ordinary forfeiture. Removed for long SO leases by the Renters' Rights Act 2025 but relevant to historic conduct and to understanding why the lender protection clause exists. [source: Renters' Rights Act information note — GOV.UK](https://www.gov.uk/government/publications/shared-ownership-and-the-renters-rights-act-letter-to-registered-providers-of-social-housing/information-note-for-registered-providers) - **Full repairing liability on pre-2021 leases.** You may be liable for 100% of all repairs (including external/structural) despite owning, say, 25%. No landlord repair contribution before the 2021 model. [source: Shared Ownership Leases — Leasehold Advisory Service](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) - **Limited statutory leaseholder rights.** SO leaseholders are generally **not** "qualifying tenants" for statutory lease extension or collective enfranchisement until they staircase to 100% (flats) and may be excluded from buying the freehold of a house. [source: Differences between a shared ownership lease and an ordinary long lease — LEASE](https://www.lease-advice.org/leasehold/basics/shared-ownership/how-shared-ownership-leases-are-different/) - **Restricted staircasing** in Designated Protected Areas (rural/National Park): you may never be able to buy beyond 80% — perpetual SO. [source: Restricted staircasing — bpha](https://www.bpha.org.uk/living-in-my-home/restricted-staircasing/211/) - **Full service charge regardless of share.** You pay 100% of the service charge even on a 10% share. [source: Differences between a shared ownership lease and an ordinary long lease — LEASE](https://www.lease-advice.org/leasehold/basics/shared-ownership/how-shared-ownership-leases-are-different/) - **Resale is constrained** by the landlord's pre-emption/nomination period before you can sell on the open market. [source: Shared Ownership Leases — LEASE](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) - **Lender refusal risk** where a (usually older) lease lacks an adequate Mortgagee Protection Clause; a Deed of Variation may be needed. [source: Shared Ownership conveyancer guidance — UK Finance Lenders' Handbook context](https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/question-list/1882/) --- ## 1. The leasehold nature of Shared Ownership Almost all SO properties are **leasehold**, including SO **houses**. A shared ownership lease is a form of long leasehold under which the leaseholder buys a *share* of the equity (the "Acquired Percentage" / "Initial Percentage") and pays **rent** on the share retained by the landlord. You hold **one lease over the whole dwelling** — not a deed to a fraction of it. [source: Shared Ownership Leases — LEASE](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) [source: Differences between a shared ownership lease and an ordinary long lease — LEASE](https://www.lease-advice.org/leasehold/basics/shared-ownership/how-shared-ownership-leases-are-different/) Legally important consequences of the leasehold structure: - **Hybrid status.** The arrangement combines a *long lease* (the share you bought, paid for by a premium) with a *tenancy* (rent on the retained share). Historically the rent element made the lease an **assured tenancy** under the Housing Act 1988 — see §6 — which is the root of the forfeiture/possession problem. [source: Renters' Rights Act information note — GOV.UK](https://www.gov.uk/government/publications/shared-ownership-and-the-renters-rights-act-letter-to-registered-providers-of-social-housing/information-note-for-registered-providers) - **Houses are still leasehold.** Unlike a normal new-build house (usually freehold), a SO house is held on a lease from the RP. You only obtain the freehold by *staircasing to 100%* and triggering the lease's freehold transfer mechanism (Schedule 5, Part 2 "Draft Freehold Transfer Deed" in the 2021 house model lease). [source: AHP 2021–2026 SO **house** model lease (Oct 2023, CPI) — GOV.UK / Trowers & Hamlins (downloaded)](https://www.gov.uk/government/publications/affordable-homes-programme-2021-to-2026-standard-shared-ownership-model-leases) - **You pay the *full* service charge**, not a share-proportionate amount. [source: Differences between a shared ownership lease and an ordinary long lease — LEASE](https://www.lease-advice.org/leasehold/basics/shared-ownership/how-shared-ownership-leases-are-different/) --- ## 2. The MHCLG/DLUHC model Shared Ownership lease (2021 model) The government publishes **model leases** that grant-funded RPs must use for SO homes funded through Homes England's Affordable Homes Programme 2021–2026 (and s106 SO). The model leases are drafted by **Trowers & Hamlins LLP**. The official collection page hosts four current Word templates: **flat / house × CPI-based / RPI-based rent review** (October 2023 versions). [source: AHP 2021–2026 Standard Shared Ownership model leases — GOV.UK](https://www.gov.uk/government/publications/affordable-homes-programme-2021-to-2026-standard-shared-ownership-model-leases) [source: 2016–2021 SOAHP model leases — GOV.UK](https://www.gov.uk/government/publications/shared-ownership-and-affordable-homes-programme-2016-to-2021-standard-shared-ownership-model-leases-2016-to-2021) [source: Shared Ownership historic model leases — GOV.UK](https://www.gov.uk/government/collections/shared-ownership-historic-model-leases) **Documents downloaded to `sources/`** (from `assets.publishing.service.gov.uk`): - `AHP-2021-2026-SO-flat-lease-Oct2023-CPI.docx` — SO **flat** lease, October 2023, CPI rent review. - `AHP-2021-2026-SO-house-lease-Oct2023-CPI.docx` — SO **house** lease, October 2023, CPI rent review. > Note: gov.uk publishes the model leases only as **.docx Word templates** (with "fundamental clauses highlighted blue" and `[ ]` fill-ins), not as a finalised PDF. There is no single signed PDF model lease to fetch. ### 2.1 Structure of the 2021 house model lease (from the actual document) The downloaded house lease's table of contents confirms the core architecture: - **Clause 3 — Leaseholder's Obligations:** pay rent (3.1), interest on late rent (3.2), insurance premiums (3.3), outgoings (3.4), **repair (3.5)**, decoration, no alterations without consent (3.9), **Disposals when Acquired Percentage < 100% (3.20)** (the resale/pre-emption gateway), entry of a Land Registry restriction (3.23). - **Clause 4 — Landlord's Obligations:** quiet enjoyment (4.1), insure (4.2), **External and Structural Repairs (4.4)** — the new landlord repair contribution. - **Clause 5 — Provisos:** **Landlord's Protection Provisions (5.1)**, **Proviso for Forfeiting the Lease (5.2)**, surrender/frustration (5.8), expert determination (5.9). - **Clause 6 — Mortgage protection** (the Mortgagee Protection Clause). - **Schedule 4 — Rent Review**; **Schedule 5 — Staircasing** (Part 1 provisions, Part 2 *Draft Freehold Transfer Deed*); **Schedule 6 — The Initial Repair Period**; **Schedule 7 — 1% Staircasing**; **Appendix 1 — Memorandum of Staircasing**; **Appendix 2 — Example Notice of Rent Increase**. - HM Land Registry **prescribed clauses** (LR1–LR13): **LR8 records that the lease "contains a provision that prohibits or restricts dispositions"** and a **restriction** is entered against the title — i.e. you cannot sell or transfer without complying with the lease and obtaining the RP's certificate of compliance. [source: AHP 2021–2026 SO house model lease (Oct 2023, CPI) — GOV.UK / Trowers & Hamlins (downloaded to sources/)](https://www.gov.uk/government/publications/affordable-homes-programme-2021-to-2026-standard-shared-ownership-model-leases) --- ## 3. 2021 model lease — key legal features | Feature | 2021 model lease | Source | |---|---|---| | **Lease term** | Minimum **990 years** (was 99) — eliminates short-lease lending problems and avoids costly lease extensions | [Chattertons — The New Model Shared Ownership Lease](https://www.chattertons.com/site/blog/residential-conveyancing-blog/the-new-model-for-shared-ownership-lease) | | **Initial Repair Period** | RP contributes to **external and structural repairs at no cost to the leaseholder** for the *earlier of* **10 years from the lease date** *or* the date of final staircasing; plus up to **£500/year** towards qualifying internal repairs | [Chattertons](https://www.chattertons.com/site/blog/residential-conveyancing-blog/the-new-model-for-shared-ownership-lease) ; [LiveWest FAQs](https://www.livewest.co.uk/new-shared-ownership-lease-model-faqs) | | **1% staircasing** | Buy in **1% increments for the first 15 years, no admin fee**; the 1% price is set by **House Price Index (HPI)**, *not* a fresh market valuation | [Chattertons](https://www.chattertons.com/site/blog/residential-conveyancing-blog/the-new-model-for-shared-ownership-lease) ; [Trowers & Hamlins — new SO model lease FAQs](https://www.trowers.com/insights/2022/march/the-new-shared-ownership-model-leases-faqs) | | **Minimum initial share** | As low as **10%** (was typically 25%), up to 75% max | [Trowers & Hamlins FAQs](https://www.trowers.com/insights/2022/march/the-new-shared-ownership-model-leases-faqs) | | **Resale nomination period** | Landlord's pre-emption/nomination window cut from **8 weeks to 4 weeks** (AHP 2021–26 and s106 SO) | [LEASE — Shared Ownership Leases](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) | | **Rent review (restriction on increases)** | From 12 Oct 2023 the model moved from **RPI + 0.5%** to **CPI + 1%**; the floor was reduced from 0.5% to **0%** (rent cannot rise if CPI ≤ −1%). Separate CPI and RPI template versions exist | [GLA London Assembly — SO rent review changes](https://www.london.gov.uk/who-we-are/what-london-assembly-does/questions-mayor/find-an-answer/shared-ownership-rent-review-changes) ; [Capsticks — SO model lease rent reform](https://www.capsticks.com/insights/updates-to-the-shared-ownership-model-lease-rent-reform-what-do-rps-need-to-know) | --- ## 4. Pre-2021 / older model leases — the full repairing problem Older model leases (pre-2015 and the 2016–2021 generation) typically granted terms of **99 or 125 years** and were **full repairing leases**. The legal mechanism: the leaseholder's repair covenant (the pre-2021 equivalent of clause 3.5) makes the **leaseholder liable for 100% of all repairs and maintenance — internal *and* external/structural — regardless of the percentage share owned**, and there was **no landlord repair contribution** at all. [source: Shared Ownership Leases — LEASE](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) [source: A guide to your shared ownership lease — Hastoe Group](https://www.hastoe.com/living-in-your-home/homeowners/shared-owners/your-shared-ownership-lease/) Why this is contentious: - **Mismatch of risk and ownership.** A 25% owner can be liable for 100% of a roof or structural bill, while the landlord — who owns 75% of the equity and collects rent — contributes nothing. [source: Shared Ownership Leases — LEASE](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) - **Two-tier system.** Because the landlord repair contribution only arrived with the 2021 model, every lease granted before then is permanently outside it (no retrospective benefit), creating a structural inequity between newer and older shared owners. [source: The New Model for Shared Ownership Lease: a decade of repair costs for landlords — Local Government Lawyer](https://www.localgovernmentlawyer.co.uk/housing-law/315-housing-features/47594-the-new-model-for-shared-ownership-lease-a-decade-of-repair-costs-for-landlords) - **Term disparity.** Shared owners were frequently given **99-year** leases on the same development where market-sale buyers received **125 or 999 years**, compounding the lending and lease-extension problems for SO buyers. [source: Shared Ownership Leases — LEASE](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) - **"Worse than renting"** critique: shared owners are social-housing-style tenants for the rent element yet bear owner-level liabilities (full repairs, full service charge), with weak statutory protections. [source: Shared ownership — a misnomer... — Leasehold Knowledge Partnership](https://www.leaseholdknowledge.com/shared-ownership-a-misnomer-that-can-be-worse-than-renting-and-worse-than-leasehold-says-solicitor/) --- ## 5. Staircasing — the legal mechanism **Staircasing** is the contractual right (Schedule 5 of the 2021 model lease) to buy further shares until you reach 100%. Older leases usually permit a maximum of **three** staircasing transactions, commonly in **10% minimum increments**, priced at **market value** as assessed by an independent RICS surveyor appointed by/agreed with the landlord. The 2021 model adds **1% staircasing** (Schedule 7) for the first 15 years priced on **HPI** rather than a fresh valuation. [source: Differences between a shared ownership lease and an ordinary long lease — LEASE](https://www.lease-advice.org/leasehold/basics/shared-ownership/how-shared-ownership-leases-are-different/) [source: Trowers & Hamlins — new SO model lease FAQs](https://www.trowers.com/insights/2022/march/the-new-shared-ownership-model-leases-faqs) Key legal instruments inside the staircasing machinery: - **Memorandum of Staircasing** (Appendix 1 of the model lease). After each share purchase, landlord and leaseholder execute a memorandum recording the new Acquired Percentage and the **new (reduced) Specified Rent**. It is the formal evidence of the equity change endorsed on the lease. The standard Memorandum of Staircasing is used to document a 1% purchase. [source: Shared Ownership — the new model — Ellisons](https://ellisons.com/news/shared-ownership-the-new-model/) - **Freehold transfer on final staircasing (houses).** For a SO *house*, reaching 100% triggers transfer of the **freehold** to you under the lease's draft Transfer Deed (Schedule 5 Part 2). For a flat you retain a (now 100%, peppercorn-rent) long lease. [source: AHP 2021–2026 SO house model lease — GOV.UK (downloaded)](https://www.gov.uk/government/publications/affordable-homes-programme-2021-to-2026-standard-shared-ownership-model-leases) - **Mortgagee Protection Clause** (clause 6) — see §8. - **Landlord's pre-emption / nomination rights on resale** (clause 3.20 — "Disposals of the Premises when the Acquired Percentage is less than 100%"). If you have **not** staircased to 100% and want to sell, you must first offer the property to the landlord or to a buyer **nominated by the landlord**; the price is fixed by an independent surveyor appointed by the landlord. Only if the landlord does not exercise the right within the nomination period (**8 weeks** historically; **4 weeks** under AHP 2021–26 / s106) may you sell on the open market, subject to conditions. After **final staircasing** the homeowner can sell freely, but the landlord retains a **21-year right of pre-emption** to preserve the home for affordable housing. [source: Shared Ownership Leases — LEASE](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) [source: Shared Ownership — Change to Pre-Emption Rights — Winckworth Sherwood (PDF)](https://wslaw.co.uk/wp-content/uploads/2017/12/shared-ownership-2.pdf) --- ## 6. Section 106 agreements and restricted staircasing (rural / protected areas) **Section 106 of the Town and Country Planning Act 1990** allows a local planning authority to bind land via a **planning obligation** — a legally binding agreement that may restrict the development or use of land, require it to be used in a specified way, or require payments. [source: Town and Country Planning Act 1990, s.106 — legislation.gov.uk](https://www.legislation.gov.uk/ukpga/1990/8/section/106) Many SO homes are delivered as a planning condition under s106, which is why "s106 shared ownership" is a distinct category with its own (often more restrictive) lease terms. **Designated Protected Areas (DPAs) / restricted staircasing.** In areas designated by the Secretary of State — predominantly rural areas, National Parks, AONBs — affordable housing must be preserved in perpetuity. SO homes there are sold on a **DPA model lease** that **caps staircasing (commonly at 80%)** so the home can never be fully bought out and always remains shared ownership for future local buyers. This is "**restricted staircasing**". [source: Restricted staircasing — bpha](https://www.bpha.org.uk/living-in-my-home/restricted-staircasing/211/) [source: Shared Ownership Leases — LEASE](https://www.lease-advice.org/advice-guide/shared-ownership-leases/) Practical legal consequences: you can never obtain the freehold of a restricted SO house; the landlord's pre-emption is effectively permanent; resale is always to a local-connection / eligible buyer. --- ## 7. Statutory framework and forfeiture risk ### 7.1 Core statutes - **Housing Act 1985 / Housing Act 1988** — provide the social-housing and tenancy framework. The rent element of an SO lease historically made it an **assured tenancy** under the **Housing Act 1988** (Schedule 2 grounds for possession). [source: Renters' Rights Act information note — GOV.UK](https://www.gov.uk/government/publications/shared-ownership-and-the-renters-rights-act-letter-to-registered-providers-of-social-housing/information-note-for-registered-providers) - **Leasehold Reform, Housing and Urban Development Act 1993** — statutory lease extension and collective enfranchisement for "qualifying tenants". **SO leaseholders are generally NOT qualifying tenants** while the share is below 100%: a SO leaseholder of a *flat* only acquires the statutory right to extend once they have **staircased to 100%**; SO leaseholders are **not** qualifying tenants for **collective enfranchisement** (buying the freehold collectively). A SO *house* generally does not qualify for freehold purchase under the **Leasehold Reform Act 1967** where the lease already provides for freehold transfer on final staircasing (hence the **Leasehold Reform Act 1967 Declaration**, clause 12 of the model lease). [source: Differences between a shared ownership lease and an ordinary long lease — LEASE](https://www.lease-advice.org/leasehold/basics/shared-ownership/how-shared-ownership-leases-are-different/) [source: Shared ownership leasehold reforms — LEASE](https://www.lease-advice.org/leasehold/basics/shared-ownership/reforms/) - **Leasehold and Freehold Reform Act 2024** — extends lease-extension terms (e.g. longer extensions, removal of the 2-year ownership wait, abolition of marriage value). Relevance to SO is limited: shared owners remain **exempt from collective freehold acquisition**, though the reforms improve the position of those who *do* qualify (e.g. fully-staircased owners). [source: Shared ownership leasehold reforms — LEASE](https://www.lease-advice.org/leasehold/basics/shared-ownership/reforms/) [source: Leasehold and Freehold Reform Bill — Shared Ownership Resources](https://www.sharedownershipresources.org/campaigning/consultation-responses/leasehold-and-freehold-reform-bill/) - **Renters' Rights Act 2025** — see §7.3. ### 7.2 The forfeiture risk explained precisely The model lease contains a **"Proviso for Forfeiting the Lease" (clause 5.2)**. It is triggered where, among other things, **the Specified Rent is unpaid for 21 days after becoming due** (whether formally demanded or not), or other covenants (service charge, repair, etc.) are breached. On forfeiture the **entire lease ends and the landlord recovers possession of the whole home** — your purchased equity share is **not protected or automatically refunded**. Because part of the home is a tenancy and part is "owned", a relatively small arrears figure can jeopardise the full asset. [source: AHP 2021–2026 SO house model lease (clause 5.2) — GOV.UK (downloaded to sources/)](https://www.gov.uk/government/publications/affordable-homes-programme-2021-to-2026-standard-shared-ownership-model-leases) [source: Shared interest — The Law Society Communities](https://communities.lawsociety.org.uk/june-2022/shared-interest/6002343.article) The **historic aggravating factor** was **Ground 8, Schedule 2, Housing Act 1988**: because the SO lease was an assured tenancy, a landlord could seek **mandatory possession** for ≥8 weeks' (or 2 months') rent arrears. Ground 8 is **mandatory** — the court has **no discretion** and there is **no relief from forfeiture** mechanism — making it markedly faster and harsher than ordinary forfeiture (where a leaseholder can apply for relief, usually within 6 months of the order). A lender will normally step in to clear arrears and protect its security, but the speed and unfamiliarity of Ground 8 proceedings made this a real risk. [source: Renters' Rights Act information note — GOV.UK](https://www.gov.uk/government/publications/shared-ownership-and-the-renters-rights-act-letter-to-registered-providers-of-social-housing/information-note-for-registered-providers) [source: Ground Rent, Assured Tenancies & s.8 of the Housing Act 1988 — JB Leitch](https://www.jbleitch.co.uk/news-insights/blogs/ground-rent-assured-tenancies-s-8-of-the-housing-act-1988/) ### 7.3 Renters' Rights Act 2025 — current position (as of 2026-05-16) From **27 December 2025**, leases with a fixed term of **more than 21 years** (which covers SO long leases) are **excluded from the assured tenancy system**. Consequences confirmed by the government information note: - SO homes **can no longer be repossessed under Ground 8** of the Housing Act 1988 for rent arrears — the harsh mandatory route is closed for long SO leases. [source: Renters' Rights Act information note — GOV.UK](https://www.gov.uk/government/publications/shared-ownership-and-the-renters-rights-act-letter-to-registered-providers-of-social-housing/information-note-for-registered-providers) - SO leases are now "**governed by the terms of the lease and by relevant leasehold and wider landlord and tenant legislation**". Landlords pursue arrears via **debt recovery / damages claims** and **forfeiture remains available but as a discretionary remedy of the court** (so relief from forfeiture is available). [source: Renters' Rights Act information note — GOV.UK](https://www.gov.uk/government/publications/shared-ownership-and-the-renters-rights-act-letter-to-registered-providers-of-social-housing/information-note-for-registered-providers) - A further change to subletting/possession rules takes effect **1 May 2026** (use of s.8 grounds for moving in or selling). [source: Renters' Rights Act information note — GOV.UK](https://www.gov.uk/government/publications/shared-ownership-and-the-renters-rights-act-letter-to-registered-providers-of-social-housing/information-note-for-registered-providers) [source: The Renters' Rights Bill — impact on shared ownership — Trowers & Hamlins](https://www.trowers.com/insights/2025/july/the-renters-rights-bill-the-impact-on-shared-ownership) **Net effect for a buyer in 2026:** the worst-case "mandatory, no-discretion possession for arrears" route is gone for long SO leases, but forfeiture of the whole home for arrears/breach is **still possible** as a discretionary court remedy. Arrears on rent or service charge remain a serious risk to the entire asset; this risk is the reason the lease forces in a lender-protection clause. ### 7.4 Right to Acquire / Right to Buy interaction Fully staircasing to 100% is the SO route to outright ownership; SO is the government's "low-cost home ownership" tenure rather than a Right to Buy/Right to Acquire discount scheme. Right to Acquire and Right to Buy are separate statutory schemes for assured/secure tenants of social landlords; **Voluntary Right to Buy receipts** can fund SO homes (those homes use the 2021 model leases from 1 April 2021). For DPA/restricted homes, the staircasing cap means you can never fully acquire — restricted staircasing overrides the usual route to 100%. [source: Capsticks — SO model lease rent reform / VRTB funding scope](https://www.capsticks.com/insights/updates-to-the-shared-ownership-model-lease-rent-reform-what-do-rps-need-to-know) [source: Restricted staircasing — bpha](https://www.bpha.org.uk/living-in-my-home/restricted-staircasing/211/) --- ## 8. Lender requirements — Mortgagee Protection Clause Mainstream lenders will only lend on a SO lease that contains an adequate **Mortgagee Protection Clause (MPC)** (clause 6 of the model lease). Its function is to **protect the lender's security against the landlord's forfeiture/possession rights**: it requires the landlord to notify a registered mortgagee of statutory notices and possession claims, gives the lender prior written notice (commonly ≥14 days) before proceedings, and **indemnifies the lender** where sale proceeds after default are insufficient to cover the outstanding capital, a capped period of unpaid interest, reasonable recovery costs (legal/valuation/agency, capped — e.g. 3% of market value for post-6-April-2010 leases), and amounts advanced to clear rent/service-charge arrears. The MPC does **not** apply where the leaseholder has completed final staircasing before default. [source: UK Finance Mortgage Lenders' Handbook — shared ownership context](https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/question-list/1882/) [source: Shared ownership — mortgagee protection clauses — Social Housing](https://www.socialhousing.co.uk/comment/shared-ownership-as-security--enforcement-of-mortgagee-protection-clauses-81111) **Why some lenders refuse certain leases:** - **Missing/weak MPC** in older leases — lenders may require a **Deed of Variation** to insert a compliant MPC; if the landlord will not vary the lease, a side agreement or indemnity policy may be needed, otherwise the lender declines. [source: UK Finance Lenders' Handbook — shared ownership requirements](https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/question-list/1882/) - **Short residual lease term** (the historic 99-year problem) — falls below lender minimums, hence the 2021 move to 990 years. [source: Chattertons — The New Model Shared Ownership Lease](https://www.chattertons.com/site/blog/residential-conveyancing-blog/the-new-model-for-shared-ownership-lease) - **Onerous/unmodelled terms** — restricted staircasing, unusual rent-review formulae, or non-model bespoke leases can fall outside lender criteria in the UK Finance Handbook. [source: Shared Ownership conveyancer guidance — Skipton/UK Finance (PDF)](https://www.skipton-intermediaries.co.uk/content/dam/sbs-sites/intermediaries/documents/guides-and-forms/shared-ownership-conveyancer-guide.pdf) --- ## Appendix — Lease generations at a glance | | Pre-2015 / 2016–2021 model | 2021 model (AHP 2021–26 / s106) | |---|---|---| | Typical term | 99 or 125 years | **990 years** | | Repairs | **Leaseholder 100% (full repairing)** | RP covers external/structural for ~10 yrs + £500/yr internal | | Staircasing increments | Usually 10%, max 3 times, market value | + **1% steps** first 15 yrs, HPI-priced | | Min initial share | Often 25% | **10%** | | Resale nomination | 8 weeks | **4 weeks** | | Rent review | RPI + 0.5% | **CPI + 1%** (or RPI variant), 0% floor | | Assured tenancy / Ground 8 | Yes (until 27 Dec 2025) | Removed for long leases from 27 Dec 2025 | Sources as cited inline above; primary collection: [AHP 2021–2026 model leases — GOV.UK](https://www.gov.uk/government/publications/affordable-homes-programme-2021-to-2026-standard-shared-ownership-model-leases) and [Shared Ownership historic model leases — GOV.UK](https://www.gov.uk/government/collections/shared-ownership-historic-model-leases).