Shared Ownership Lease Extension

10 min read
You can get a shared ownership lease extension but unless you have already staircased to 100%, the normal statutory rules don't apply, leaving you with an informal process with rules set by your individual housing association and sometimes you might want to consider staircasing either first or at the same time, depending on your circumstance.

Shared ownership lease extension solicitors with SAM Conveyancing. If you are someone looking to buy a shared ownership resale lease extension is certainly something you need to factor in regarding what you are prepared to pay if the lease term is approaching 80 years left or less (see box below). 

This article examines matters relevant to your negotiations and examines some decisions you may choose to make when you take up ownership.

Skip to frequently asked questions:

Why has shared ownership lease extension become an issue?

Shared ownership leasehold contracts are a comparatively recent invention and the terms are normally originally for either 99 years or 125 years.

Many original shared ownership lease terms have now reduced to 80 years or below, which is the point when many lenders will not consider either remortgaging against them or loaning funds to a prospective buyer to buy the properties involved, making them difficult to sell (click on the link to read further discussion of these matters).

As will be seen below, there are a number of solutions regarding getting a lease extension for your shared ownership property but you have to take a number of your own individual factors into account when choosing the right one for your needs.

We look at this topic in the following ways:

Shared Ownership? Want a Lease Extension?

Our property lawyers specialise both in shared ownership and lease extensions and can guide you to successful completion whether you're taking the formal or informal route. They are on hand throughout your process to give you the appropriate lease extension advice. 

We offer the complete service with our solicitors and RICS lease extension valuers. Click to get a competition quote or call us now on 0333 344 3234 (local call charges apply)

RICS Valuers - Experienced Solicitors - Competitive Prices - National Coverage



    What is the legal basis for a shared ownership lease extension?

As the holder of a shared ownership lease you are specifically excluded from the right to a lease extension under the terms of the Leasehold Reform Housing and Urban Development Act 1993, unless you own 100% of the lease, i.e. you've staircased your shared ownership up to 100%.

However, the statutory or formal lease extension described, which, if you qualify for it and it goes to plan, entitles you to an extra 90 years added to your lease term and a peppercorn (zero) ground rent, isn't the only type of lease extension you can get for your home.

Most housing associations now offer their shared ownership clients an informal way to extend their leases, but you need carefully to examine the exact terms involved because you have no recourse to the First-tier Tribunal (Property Chamber) (click to find out more) to rule on any disputes, which you would have under the formal route.

    What are the Pros and Cons of staircasing for a 'formal' lease extension?

Essentially the less you have to pay out to get you to 100% ownership then the easier this path to a lease extension might prove to be. There are always pros and cons regarding informal and formal lease extensions, however with the statutory path:
  • there are fixed time frames;
  • it's that much easier to calculate what your total costs will be;
  • it's highly likely to meet with success so long as you have the money for the process (although there can be no outright guarantee of this)
  • you know that you'll get another 90 years on your lease term and a peppercorn rent; and
  • you can involve the First-tier Tribunal in the event of a dispute.
  • staircasing to 100% might prove more costly than you can afford or get a mortgage for, particularly if you only have a 25% share;
  • you have to satisfy the normal criteria for the formal route so if you haven't owned your 100% share for 2 years, you are disbarred;
  • you might find that an informal lease extension offered by your housing association is cheaper regarding your outlay and quicker in terms of how fast you'll get it (although there are absolutely no guarantees that it will complete; it is, after all, informal)
  • there may well be Stamp Duty Land Tax (SDLT - England) or Land Transaction Tax (LTT - Wales) to pay because of your staircasing to 100% (click to find out more); and
  • overall you might find that the housing association offer you a far more affordable lease extension, even if you haven't owned your property for that long.

Click if you want to use our Stamp Duty Calculator (England) or our Land Transaction Tax Calculator (Wales)


    How do housing associations structure their informal lease extensions?

To avoid the difficulties regarding the reselling of shared ownership leases with lease terms of 80 years and less, housing associations generally offer an informal lease extension process.

New to Informal Lease Extensions?

Please read this article: Informal Lease Extension Process

We looked at a few housing associations' policies and found, not unlike much in the shared ownership world, that there were more similarities than differences among them.

In general, regarding a shared ownership lease example:
  • you have to have owned your property for 6 months to apply for an informal lease extension
  • you are encouraged to use the housing association's appointed lease extension valuer, this will cost you around £500 (and the premium that you'll have to pay for your lease extension is derived from this valuation, although the housing association will decide the exact figure)
  • you have to pay an administration fee (normally around £100 - £300)
  • you have to pay solicitor's costs for the conveyancing (normally around £900)
  • as with the formal process, you'll most likely be offered an extra 90 years added on to your lease term (although some housing associations might allow some variation from this period)
  • if you don't complete once you've started the process, you won't get any of your fees back
  • the premium you'll pay is for a lease extension for the whole property rather than just your portion of it
  • you won't be able to apply if you've any arrears on your account


    What are the Pros and Cons of an informal shared ownership lease extension?

Please note that even if you have staircased to 100%, you still have the option to pursue the informal path to a lease extension therefore some points made below may not be relevant if you have staircased to 100%.


  • you don't have to have staircased to 100% unlike for the formal process
  • you don't have to wait until 2 years have elapsed after you've staircased to 100% unlike for the formal process (normally 6 months and no need to staircase at all)
  • the informal process is simpler for both parties
  • the informal process regarding the cost of extending shared ownership lease may be cheaper for you - you won't have to pay for two sets of valuation fees for example
  • you may be able to vary your lease terms at the same time, depending on the housing association
  • you may be able to get a shorter or longer lease term than the 90 year formal extension fixed term (bargain for 125 years for example)


  • you'll be paying for a lease extension on the whole property, not just your portion and if you were to sell up without staircasing, you won't get any financial return for this outlay
  • the lease extension increases the value of your property so this means that your specified rent might increase - the peppercorn rent of the formal lease extension has no effect here
  • similarly the increase in the whole value of your property means that you'll have increased the cost in the future of buying any further percentages/staircasing
  • while you are a rent payer, you can still get evicted if you default on rent payments and you will get no compensation for any payment you made for extending the lease
  • in the event of a dispute, you can't make use of the First-tier Tribunal (Property Chamber); you either agree and proceed or pull out and lose any money you've spent on the process
  • if you choose not to have your own separate legal representation - which is one of the benefits in cost terms of taking the informal path - the downside is you won't have someone legally acting purely on your behalf to scrutinise the lease and deed of variation; it's possible that there might be less than fair covenants written in


    When should you staircase if at all or should you just staircase instead of extending your lease?

As stated above, you should bear in mind that if you extend your lease, staircasing becomes more expensive because you will have increased the value of the property.

Therefore you need to be clear about your intentions.

Staying put? Consider staircasing first

If you are going to stay for the foreseeable future in your property, paying for staircasing before going for a lease extension has a number of advantages.

The staircasing itself will be cheaper compared to what it would cost if you extended your lease but you should also consider that when you staircase, it'll result in your rent decreasing so there's an immediate return.

It's true to say that you'll put yourself nearer to the 100% figure where you'll have the formal lease extension procedure as an option, which is also an advantage, however you'll have to take any stamp duty liability that might occur into account.

Want to sell up or remortgage? Consider getting a lease extension and not staircasing

If your intentions are to sell up in the near future, then getting a lease extension, particularly if your lease term is approaching or under 80 years, should be your first priority.

You'll most likely be selling to someone with a mortgage and, as said previously, their lender won't lend unless there's more than 80 years on the lease term and the more the better. This is equally the case if you're looking to remortgage (click to find out more).

You'll always have the option to staircase later if you change your plans, although you'll have to pay more for doing so, as explained above.

Staying put? Funds scarce? Consider just staircasing alone

For a shared ownership property, both lease extensions and staircasing are highly likely to cost tens of £1,000s. 

If you can afford one of these and not both and you're staying put, you should always bear in mind that staircasing not only increases your holding - and therefore your saleable equity - in your property but also means that you'll immediately pay less rent.

Shared Ownership? Want a Lease Extension?

Our property lawyers specialise both in shared ownership and lease extensions and can guide you to successful completion whether you're taking the formal or informal route. 

We offer the complete service with our solicitors and RICS lease extension valuers. Click to get a competition quote or call us now on 0333 344 3234 (local call charges apply)

RICS Valuers - Experienced Solicitors - Competitive Prices - National Coverage

Frequently Asked Questions

Always check the terms of your lease before making any alterations. If your lease prohibits you from making a change, you may be able to get around this by agreeing a deed of variation with your freeholder.
If you've not yet bought a shared ownership property, read our guide What is shared ownership? To see if shared ownership is right for you. We compare the pros with the disadvantages of shared ownership, such as the risk of negative equity.
In most cases, your housing association has right of first refusal. This usually expires after a certain amount of time, but can still hold true even when you have staircased to %100. The first step is to book a shared ownership valuation.
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