Britain’s quarter million shared ownership leaseholders may be feeling that that little bit more secure with the coming into force of the Renters’ Rights Act 2025 on 1st May 2026. The same with apply to any other leaseholder whose annual ground rent had escalated to more than £1,000 in Greater London or £250 elsewhere. Before the changes took effect, any of those leaseholders could have been thrown out of their properties if they fell behind in their rent by as little as 2 months. This was because annual ground rents above the £250 [£1,000] threshold were technically classed as assured tenancies under the Housing Act 1988, which meant that a ground landlord could end the tenancy on grounds of rent arrears by serving notice under Section 8 of the Housing Act 1988 instead of going through a long-winded forfeiture process.Shared ownership leases which had not staircased to 100% were always caught within this trap because the rental element would always exceed the assured tenancy thresholds.
The change does not mean that shared ownership leaseholders or for that matter any other leaseholder cannot be evicted for rent arrears. It just means that the ground landlord has to go through the full forfeiture process which applies to all residential leases and which will always give a tenant relief against forfeiture if they can make up the rental shortfall and reimburse associated legal fees. What the Renters’ Rights Act did was to take any fixed term residential lease for more than 7 years outside the assured tenancy regime.
Shared ownership means that the residential leaseholder does not own their property outright until they have staircased to 100% but instead owns only their share in the property and pays a social rent on the remainder. The purpose of shared ownership is to enable anyone who cannot afford to buy outright, a means of getting on the housing ladder.
BRUCE AND HOLLY 