Shared Ownership Service Charges, Ground Rent, and Major Works — What You Are Liable For

Leasehold Obligations From Day One

One of the most important things to understand about shared ownership is that your leasehold obligations — including service charges and, in some cases, ground rent — apply from the moment you move in, regardless of your ownership share. Even if you own just 25% of the property, you are typically liable for 100% of the annual service charge.

This surprises many first-time shared ownership buyers who expect their costs to be proportionate to their share. They are not. The service charge pays for the upkeep of the building and communal areas for all residents, and every leaseholder in the building contributes equally (or in accordance with the apportionment set out in their lease).

Service Charges Explained

A **service charge** is a contribution made by leaseholders towards the costs of managing, maintaining, and insuring the building. In a shared ownership flat or apartment block, this typically covers:

• Buildings insurance (often arranged by the housing association or freeholder)
• Cleaning and maintenance of communal areas
• Lift maintenance and repairs
• Door entry systems and communal utilities
• Estate management and housing association administration
• A reserve (or sinking) fund for future major works

Service charges vary enormously by development, location, and the age of the building. In newer developments, charges of **£150 to £400 per month** are common in London and the South East. In lower-cost areas, charges may be £80 to £150 per month.

Your service charge is separate from your shared ownership rent. Both are ongoing costs you must budget for.

Ground Rent

New shared ownership leases granted in England from 30 June 2022 are subject to the Leasehold Reform (Ground Rent) Act 2022, which prohibits landlords from charging more than a **peppercorn ground rent** (effectively zero) on new residential leases. If your shared ownership property was acquired after this date, you should not be paying a meaningful ground rent.

However, if you purchased a shared ownership property before 30 June 2022, your lease may include a ground rent clause — potentially one that escalates over time. Check your lease, and if you have concerns about a ground rent that increases substantially, seek legal advice.

Major Works

This is one of the most significant financial risks for shared ownership leaseholders. Under a shared ownership lease, leaseholders are liable to contribute to major works — substantial repairs or improvements to the building, such as roof replacement, external wall insulation, cladding remediation, or lift replacement. These costs can be very large and are usually recovered through a **Section 20 notice** process.

A critical point under shared ownership: **you pay 100% of your apportioned share of major works costs, regardless of how much of the property you own**. Owning 25% of your home does not mean paying 25% of the major works bill — you pay your full leaseholder share as set out in the lease.

**Repairs liability and 100% ownership.** The housing association has some residual responsibility for repairs under a shared ownership arrangement when you own less than 100%. However, once you staircase to 100%, you become solely responsible for all repairs and maintenance, including any future major works contributions. This shift in liability is a factor worth considering when planning your staircasing strategy.

Checking Service Charges Before You Buy

Before purchasing a shared ownership property, your solicitor should request:

• The last three years of service charge accounts
• Details of any planned or anticipated major works
• The current buildings insurance premium
• The balance in the reserve fund

A low or depleted reserve fund is a warning sign that a large major works bill may be coming. If major works are already known or planned, your solicitor should raise enquiries to understand the likely cost and timeline.

Use our [Shared Ownership Calculator](/shared-ownership-calculator) to factor in your full monthly housing costs — mortgage, rent, and service charges — when modelling the affordability of different ownership scenarios.