Shared Equity with a Private Landlord

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    Enquiry from a person who has sold their house and has a sum of money to invest into a new property, more appropriate to that person’s needs. However, the sum of money is not enough to buy outright and has suggested that a private investor is willing to put up the remaining percentage of finance needed to buy a property and then rent that part to the tenant. I am satisified this is an arrangement that HB can now consider. I believe the rent element would be considered under the LHA arrangements. Is this correct or is there a requirement to refer? The enquirer has also made reference to the following:-

    7. Policy Background

    Regulations 2(3)(a) and 3(3)(a)
    7.1 Communities and Local Government (CLG) envisage greater diversity in England of the shared ownership sector in the future, with greater involvement of private sector landlords. At the point of entry for all new shared ownership leases the home buyer will need to demonstrate the financial capacity to meet the mortgage and rental liabilities and Housing Benefit is only expected to support those who subsequently face a change in circumstances that necessitates a claim for benefit.

    Question….is there an actual requirement to be able to pay the rent and the mortgage (say for at least one week or one month or one year?) to then allow a claim for HB on the rent element?

    The person has clearly stated that she will require the asisstance of HB.

    Surely the policy statement above contradicts anyone entering a rental agreement who will clearly need HB in order to meet their rental payments.

    I believe that I can accept a claim in good faith for HB from a person knowing that they will need assistance with their rent BEFORE they actually sign the tenancy agreement on their shared equity arrangement. I know we accept brand new claims from day one of the tenancy from claimants who’s landlord is a Housing Association.

    Just need someone to agree with my views (please) before giving my final reply to the learned person making the enquiry to me. If I’m wrong can I have the correct answer?

    Thank you.


    I am not sure what regulations you are quoting from there – do you have the source?

    The passage quoted seems to be concerned with eligibiity to acquire a shared ownership lease in the first place. Is the document concerned with local authorities offering shared ownership leases to RTB tenants? That is the only way I can think that CLG would have any regulatory control over it.

    Once a person has a shared ownership lease it is clear that they are entitled to HB under HB legislation – I do not see how a CLG guidance note in any way overrides the HB legislation.

    I would say the most important thing in this case is to be absolutely sure that it is a shared ownership tenancy you are dealing with: that is where the landlord owns either the freehold or a superior lease and grants the claimant an inferior lease for a premium that reflects a “staircase” percentage, with the rent adjusted accordingly.

    If [b:0d15ef569e]either[/b:0d15ef569e]:

    – the claimant and landlord are both registered as joint owners, [b:0d15ef569e]or[/b:0d15ef569e]
    – the claimant is the registered owner but the “landlord” is entitled to a share of future equity (an arrangement known as “shared equity” and very different from shared ownership)

    – the claimant would not be eligible for HB.

    Assuming it is a shared ownership tenancy, you are right that it is assessed as an LHA case because Reg 13C(5)(c) very carefully keeps it under LHA where the landlord is not a housing association.


    I think we have the same query, and we thought along the same lines as Peter. The query came into our benefits inbox from a person out of the area, seeking advice from various local authority’s.


    To Peter. The CLG guidnace came from the following document :-

    2007 No. 1356

    To Marlene. Thank you for your response.



    Just read the whole explanatory memorandum and it is clear they are expecting as a matter of policy that people will only be offered shared ownership leases subsidised by what was they still the HGousing Corporation if the landlord is satisfied they can meet the commitments. The HB Regulations dfo absolutely nothing to enforce that policy aspiration: as far as the Regs go, shared ownership leases are eligible for HB, period.


    We’ve had the same e-mail as well. I’ve tried to stress to her that a shared ownership lease is a particular type of ownership / arrangement and she probably needs to take advice from a solicitor or a licensed conveyancer. Like Peter, my concern is that she will enter into some other arrangement and HB won’t be payable.

    Interestingly enough, she mentioned that she had contacted about 50 different authorities and got a variety of different answers!

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