Shared Ownership Building Insurance: Who Is Responsible?

Shared Ownership Building Insurance: Who Is Responsible?

Shared ownership is a government-backed homeownership scheme that allows buyers to purchase a percentage share of a property — typically between 25% and 75% — from a housing association, while paying subsidised rent on the remaining share. One of the most common questions among shared ownership buyers is: who is responsible for building insurance in a shared ownership property?

How Building Insurance Works in Shared Ownership

In a shared ownership arrangement, the housing association (or other registered provider of social housing) retains ownership of the freehold — or in some cases acts as the head leaseholder — and it is the housing association that is responsible for arranging and maintaining buildings insurance on the property.

This is because the housing association is, in effect, the freeholder or superior landlord of the shared ownership property. Under the terms of the shared ownership lease, the housing association has the obligation to insure the building, and the cost of this insurance is typically passed on to the shared owner as part of the monthly service charge or rent.

Shared owners do not arrange their own buildings insurance. Doing so would result in duplicate cover and would likely breach the terms of your shared ownership lease.

What Does Shared Ownership Building Insurance Cover?

The buildings insurance arranged by the housing association will typically cover:

• The structure of the building (walls, roof, floors, windows, external doors)
• Communal areas and shared facilities (where applicable in blocks of flats)
• Fixed installations such as plumbing and heating systems
• Property owners' liability for injury or damage to third parties

It is important to note that buildings insurance does not cover your personal possessions, furniture, or household contents. As a shared owner, you will need to arrange your own separate contents insurance policy to protect your belongings inside the property.

What About Shared Ownership in a Block of Flats?

Where your shared ownership property is in a block of flats, the buildings insurance for the whole block will be arranged by the freeholder or the managing agent on behalf of the freeholder — again, usually the housing association. All units in the block, including any privately owned or rented flats, are typically covered under a single block policy.

Shared Ownership vs Share of Freehold: What Is the Difference?

These two terms are often confused but are very different in terms of who is responsible for insurance:

• Shared ownership: A government scheme where you buy a percentage of a leasehold property from a housing association. The housing association arranges buildings insurance as the freeholder.
• Share of freehold: An arrangement where leaseholders collectively own the freehold of their building. In this case, the leaseholders themselves — as joint freeholders — are responsible for arranging buildings insurance. Learn more about share of freehold buildings insurance.

When You Might Need Your Own Buildings Insurance Under Shared Ownership

In most shared ownership situations, you will not need to arrange separate buildings insurance. However, there are some exceptions:

• After staircasing to 100%: Once you have purchased the remaining shares and own the property in full, you will typically take on responsibility for arranging your own buildings insurance — either as a leaseholder or as a freeholder if the freehold is transferred to you.
• Shared ownership houses in some schemes: In some cases, particularly with shared ownership houses, you may be required to arrange your own buildings insurance once you have staircased to 100% ownership.

Get a Fast Quote for Building Insurance

If you are a housing association, freeholder, or property investor who needs buildings insurance for a shared ownership development or any other type of leasehold property, we can help. Get a FAST Quote today and speak to a specialist who understands shared ownership and leasehold building insurance.