Question to the Department for Levelling Up, Housing & Communities:

To ask the Secretary of State for Housing, Communities and Local Government, what steps his Department are taking to ensure that residents in a Shared Ownership Scheme are not disadvantaged by the terms of their lease, particularly in regard to service charge increases.

On 8 September the Government confirmed the new model for Shared Ownership. The new model has reduced the minimum share to 10 per cent, introduced 1 per cent staircasing and introduced a 10-year period during which the landlord will support with the cost of repairs on new build homes. These reforms will help to make the scheme more consumer friendly, more accessible and fairer, leading to a better experience for a future generation of shared owners.

In line with making Shared Ownership more consumer friendly, the Government believes very strongly that service charges should be transparent and communicated effectively, and that there should be a clear route to challenge or redress if things go wrong. The law is clear that service charges are payable only to the extent that costs have been reasonably incurred. In support of this, leaseholders, including shared owners, have the ability to apply to the Property Chamber of the First-tier Tribunal for a determination where they do not believe the charges are reasonable.

The Government established an independent working group chaired by Lord Best to raise standards across the property sector, which also considered how fees such as service charges should be presented to consumers.  The working group published its final report to Government (see: https://www.gov.uk/government/publications/regulation-of-property-agents-working-group-report) and we are considering the report’s recommendations before announcing next steps.