Shared ownership: rent and service charges

Your service charge payments will vary, depending on where you live and your lease agreement. To see how your own charge is broken down, please select from the following options:

I live in a house:

• with no estate payments
• on an estate managed by a Managing Agent
• on an estate managed by Sage

I live in a flat:

• in a Sage building on a Sage estate
• in a Sage building on an estate managed by a Managing Agent
• in a building and estate managed by a Managing Agent

We provide a service charge estimate at the end of each February, laying out what we believe it will cost to deliver your services from April that year to March the following year. You then pay this estimated amount monthly for the next 12 months. By paying small, regular amounts, you get the services you need without having to pay a huge one-off cost at the end of the year.

In the September of the following year, we check our estimate against the actual cost. If the cost is less than estimated, you'll get a credit on your rent account. If it's more than estimated, we - or your Managing Agent if you have one - will send you a debit note, asking you to pay the difference. We work hard to make sure your estimate is as accurate as possible and you’ll only ever pay the actual costs incurred as we never profit through service charges. 

• If you paid £20 a month from April 2023 to March 2024, and then we found the actual cost was £18 a month, we would contact you in September 2024 to credit you £24 (£2 a month). 

What's shared ownership rent for and how is it calculated?

We call it rent to clearly set it apart from your mortgage interest payments and it works in a very similar way. You've borrowed money from Sage to pay for some of your home but the interest rate on that loan is protected by regulation to limit the initial rate and how much it can increase by each year. This makes it different from the interest rate on a mortgage or rent increases that you might have experienced in the private rented market. 

When you rent in the private market, your landlord can choose what increase they apply to your rent. With shared ownership, all rent starts out at 2.75% and you have the certainty that you own your home and that your rent will only increase in line with the terms of your lease.

Annual rent increases
The rent you pay increases annually in April by a contractual amount, protecting you from uncontrolled changes. It will increase by one of these: 

> The Retail Price Index (RPI) of the most recent November + 0.5%

>  The RPI of the most recent September + 1%

> The Consumer Price Index (CPI) of the most recent September + 1%. 

You can find out which one applies to you by checking your lease. 

Homeowning: what it’s all about

Your lease sets out your responsibilities as well as ours as your freeholder/head leaseholder. Take a look at this breakdown of what we’re each agreeing to handle:

Your responsibilities as a homeowner

>   Pay your monthly service charge and payments on the rented part of your home

>   Take out contents insurance to protect your belongings

>   Be proud of your home, maintain it and carry out repairs as needed 

>   Ask our permission to carry out alterations 

>   Contact us if you want to buy more shares in your home or sell it.

You can find any other responsibilities set out in your lease. 

Our responsibilities as the freeholder/head leaseholder

>   Make sure you have building insurance in place

>   Maintain any communal areas or work with a Managing Agent to do so 

>   Collect your monthly payments and update you on any changes. 

(Sage is freeholder for all houses and all flats we own and manage. We are the head leaseholder for any flats we own but which are managed by a Managing Agent). 

We want to help you own your home outright, and with Sage Homes you can buy more shares of your home (called ‘staircasing’), up to 100% ownership. 

Staircasing is a great next step in your homeownership journey as you’ll reduce the amount of rent you pay. This means if you decide to sell up, you’ll benefit even more from any increase in your home’s value. If there's is a drop in your home’s value, this will also be reflected in your share’s value, however by staircasing to a larger share, you’ll get a correspondingly larger percentage of the sale.

If you staircase to 100%, you won’t pay any rent and can sell your home on the open market, giving you more money to reach the next rung on the property ladder. You can download our Shared Ownership Guide here.

• Learn more about staircasing