Shared ownership rent reviews: how do they work? Kevin Edwards, Partner with Geoffrey Leaver Solicitors, explains what you need to know.
Don’t have time to read this right now?
Here are the key takeaways:
Check your lease contract: Different leases have different arrangements for annual shared ownership rent reviews.
Inflation: Annual rent increases are based on inflation. However, different leases use different measures of inflation: usually either the Retail Price Index (RPI) or the Consumer Prices Index (CPI).
Inflation plus: Shared ownership rent reviews typically increase your rent by inflation plus a set percentage (e.g. 0.5%, 1% or 2%). Your rent won’t ever go down, regardless of whether RPI / CPI goes up or down.
Review date: Check your lease to find out when your annual rent increase applies.
Read on….
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How are annual rent increases calculated?
To understand how your annual rent increase is calculated, first you need to look at your lease contract. It’s important to understand that different leases have different arrangements for annual rent reviews. This will depend partly on the date your lease was issued, as there have been many different versions of shared ownership leases over the years.
Annual rent review: date
Your rent is reviewed annually. It’s worth making sure you know when, so you don’t have any unexpected financial surprises. For example, a rent increase relatively soon after the date you purchased your initial share.
Annual rent review: index
In your lease, ‘index’ refers to a measure of inflation. Inflation is a way of assessing how quickly the average price of goods and services is going up. There are several different ways of measuring inflation. Usually, shared ownership leases use one of two different measures.
- Retail Price Index (RPI)
- Consumer Price Index (CPI)
CPI is typically lower than RPI. However, annual rent reviews typically add a 1% increase onto CPI and a 0.5% increase onto RPI. (Older leases may have different terms.)
Annual rent review: inflation plus
You might assume that your rent increases in line with inflation. But it’s more complicated than this. Your rent generally increases by inflation PLUS a specified percentage. What the percentage is will depend on whether your contract uses the ‘new model’ lease or an older model lease. Homes England’s ‘new model’ leases increase rent by CPI + 1%. Some older leases use RPI + 0.5%, 2% or even 5%.
Annual rent review example: RPI plus 0.5%
| Current rent | £500 | |
| RPI in September 2025: | 4.5% | |
| RPI increase (£500 x 4.5%) | £22.50 | |
| 0.5% increase (£500 x 0.5%): | £2.50 | |
| Rent in 2026: | £500 + £22.50 + £2.50 | £525 |
Annual rent review example: CPI plus 1%
| Current rent | £500 | |
| CPI in September 2025: | 3.8% | |
| CPI increase (£500 x 3.8%): | £19 | |
| 1% increase (£500 x 1%): | £5 | |
| Rent in 2026: | £500 + £19 + £5 | £524 |
Will my rent go down if RPI / CPI goes down?
Unfortunately, your rent won’t go down if RPI / CPI goes into minus figures.
What will happen depends on the contractual terms in your own lease. We provide two indicative examples below. But make sure to check your own lease. As we’ve mentioned above, different shared ownership providers have different policies.
‘Standard’ shared ownership annual rent reviews
Under ‘standard’ shared ownership leases rent is calculated on an ‘upwards only’ basis. Here’s an example of a lease where this applies.
In this case, your rent will always increase by a minimum of 0.5%. Consequently, your rent will increase each and every year. Even if inflation is 0%. And even if RPI has gone into minus figures.
We’ve reworked the previous RPI example to show how your rent will increase if RPI is minus 4.5%.
| Current rent | £500 | |
| RPI in September 2025: | minus 4.5% | |
| RPI not applicable as negative | £0.00 | |
| 0.5% increase (£500 x 0.5%): | £2.50 | |
| Rent in 2026: | £500 + £2.50 | £502.50 |
‘New model’ shared ownership annual rent reviews
The situation is slightly different under the ‘new model’ for shared ownership. Although it remains the case that your rent won’t ever go down, it can’t be increased if CPI is minus 1% or lower.
Here’s an example of a lease where this applies.
We’ve reworked the previous CPI example to show what happens in five different scenarios under the ‘new model’ for shared ownership.
| Monthly rent | CPI | CPI + 1% | Rent increase | New monthly rent |
| £500 | 3.8% | 4.8% | £24 (see example above) | £524 |
| £500 | 0% | 1% | £5.00 | £505 |
| £500 | minus 0.5% | 0.5% | £2.50 | £502.50 |
| £500 | minus 1% | 0% | £0 | £500 |
| £500 | minus 3.8% | capped at 0% | £0 | £500 |
In our next Q&A we’ll publish a RENT CALCULATOR to help you understand how your rent could potentially increase over the next 25 years.
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We are extremely grateful for the support of Kevin Edwards, Partner with Geoffrey Leaver Solicitors, in creating this content.
DISCLAIMER: The information provided on this website is for general purposes only. It is not intended to be a substitute for legal, financial, tax or other professional advice. Everyone’s situation is different so always seek expert advice on any questions you may have.
Additional Resources
GOV.UK: Shared ownership homes: buying, improving and selling
Leasehold Advisory Service: free, government funded advice for a problem with your leasehold property
Shared Ownership Resources: Initial rent: Q&A with Geoffrey Leaver Solicitors
I checked my lease and realised that for the last 3 annual rent reviews my HA has been adding 2% when it should be 0.5%. I’ve contacted them to make them aware of this. I wonder how many other people have been overcharged,
Thanks for your comment, Christina. Though we’re sorry to hear you’ve been overcharged for your rent over the past three years.
It might be worth talking to the Leasehold Advisory Service to make sure you’ve covered all the bases in raising the issue with your housing association. (For example, you might want to check with Lease whether you should be using the the formal complaints process, making it clear you’re paying the incorrect amount under protest (if an incorrect amount continues to be taken via direct debit, etc.)
https://www.lease-advice.org