Right To Shared Ownership Shake Up Confirmed By MHCLG
Housing Secretary, Robert Jenrick, has confirmed the implementation of a number of measures designed to help lower income households gain a foothold onto the property ladder.
The Government had pledged to reform the shared ownership model in August, allowing for buyers to step up in 1% increments as opposed to the current model which restricts buyers to purchasing a minimum of 10% at a cost of up to £45,000.
The Government also wanted to reduce the initial minimum stake from 25% of the property to 10% in order to offer more people the chance to own their property.
These measures have now been confirmed by the Government. They now believe thousands of social tenants could purchase a stake in their home with ‘deposits as low as £2,000.’
Before the measures were implemented, a social tenant renting a £200,000 home could not buy a share in it. Under the ‘Right to Shared Ownership’ tenants will be able to buy an initial 10% stake in the property. The Government will require a 10% deposit on the initial 10% shared ownership purchase (£2,000 if the property is worth £200,000) with a small mortgage on the outstanding amount.
The Prime Minister has claimed these measures will ‘level up the whole country’ and ‘close the opportunity gap’.
Mark Hayward, Chief Executive of NAEA Propertymark comments on the Government’s plans for a new national model for shared ownership:
“Now that the measures on shared ownership have been confirmed, thousands of consumers will welcome the opportunity to increase their share of ownership more easily and to simplify the process by which they can sell their homes.
“Whilst we support introducing creative ways for consumers to get on to the housing ladder, the Government must be careful of the unintended consequences that any changes to Help to Buy could have on the rest of the market.
“In many cases these are not properties that feed into the general marketplace but into a cul de sac with no assistance to upward activity.”
Housing Secretary Robert Jenrick MP said:
“Many people want to own their home but can’t see a route towards achieving that goal. This government is determined to help people realise that ambition and boost ownership for thousands of hard-working people up and down the country.
“Owning a home is not just about the four walls around you, it’s about investing in your family, saving for the future and putting down roots in a community.
“These measures announced today will mean more people, including residents living in new housing association homes, are given the opportunity to get on to the housing ladder.”
Will these measures help to ensure the closing of the ‘opportunity gap?’ Will more lower income households benefit from the Right to Shared Ownership changes?