Short Lease Mortgages for Over 55s
At Rockhopper Later Life Finance we help customers aged 55 and over who own a shared ownership property and need mortgage advice. Shared ownership properties combine part ownership of the property with part rent to a housing association, and the mortgage side is more specialist than for wholly-owned properties. For older shared ownership customers, including those in Older Person’s Shared Ownership (OPSO) schemes, the advice needs careful attention to both the ownership structure and the age-related considerations.
We work with customers whose lease:
- Holding an existing shared ownership mortgage that is coming to the end of a fixed period
- Staircasing (buying a larger percentage share of the property from the housing association)
- Considering whether to staircase to 100 percent or remain on shared ownership
- In an Older Person’s Shared Ownership property specifically for over 55s or over 60s
- Wanting to understand why most lifetime mortgages are not available on shared ownership
- Thinking about moving out of shared ownership by selling and buying outright elsewhere
- Looking at inheritance implications of shared ownership where the share is less than 100 percent
Shared ownership can feel more complex than standard mortgage advice because you are navigating both the mortgage market and the housing association’s rules. We take the time to understand your specific scheme and the rules that apply, rather than applying a generic template.
Shared ownership works by you buying a percentage of the property (typically starting at 25 to 75 percent) and paying rent to the housing association on the remaining percentage. You hold a lease on the full property. Staircasing allows you to increase your percentage share over time by buying further percentages from the housing association, at the then-current market value of each additional share. Once you reach 100 percent you own the property outright, though it remains leasehold rather than freehold in most cases.
Mortgage options on shared ownership are narrower than on standard properties. A smaller lender pool offers shared ownership mortgages, and the underwriting takes account of both the mortgage payment and the rent on the un-owned share. Lenders consider the combined cost when assessing affordability. For staircasing transactions, the mortgage is increased to fund the purchase of the additional share, and the remaining rent reduces proportionally.
Older Person’s Shared Ownership (OPSO) schemes are specifically designed for buyers aged 55 and over. The typical OPSO structure allows purchase up to 75 percent (not 100 percent) of the property, with no rent payable on the unacquired 25 percent held by the housing association. This has become a route into purpose-built retirement accommodation for buyers who want ownership security without the full purchase cost. OPSO mortgages are a specific specialist area with a narrower lender pool still.
Lifetime mortgages are generally not available on shared ownership properties. The lifetime mortgage lender would be taking security on only the percentage you own, which creates complications in a property division between the lifetime mortgage lender and the housing association. A few specialist lenders will consider shared ownership lifetime mortgages in specific circumstances (typically OPSO schemes where the structure is more conducive), but the options are narrow.
Leasehold considerations apply to shared ownership as they do to other leasehold properties. Lease length, ground rent, and service charge all affect the mortgage. For OPSO leases, which are often specifically written for older buyers, the clauses sometimes differ from standard shared ownership leases and need careful review.
The Process
Your first conversation is a relaxed discussion about the property, the shared ownership or OPSO scheme, and your circumstances. There is no cost or obligation.
We may ask for the lease, the shared ownership agreement, and any recent service charge and rent statements. We research the market and come back with a written recommendation.
Every shared ownership case is different. A traditional shared ownership remortgage is a different conversation from an OPSO scheme purchase or a complex staircasing transaction, and our advice reflects those differences.
Speak to a Specialist Adviser
Call 0203 621 5696
Lines open 9am to 5pm Monday to Friday. Alternatively, complete the enquiry form and we will call you back at a time that suits you.