Ultimately, the aim is to help people make their first steps on the property ladder, as these changes allow buyers to do this with as little as £2,000.
Here we take a look at how the new Shared Ownership scheme will work.
What does the new model for Shared Ownership look like?
The Ministry of Housing has previously stated that helping more lower earners step onto the property ladder is a high priority for the Government.
As stated by Housing Secretary Robert Jenrick MP: “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.”
As part of this commitment, Mr Jenrick has reviewed the existing model of Shared Ownership and revised it by introducing new measures.
To help make homes more affordable for all participants of the Shared Ownership scheme, Mr Jenrick has announced that the minimum initial stake has been cut from 25% to 10%.
Plus, currently buyers can only increase their share on their property by 10% at a time. The new model will allow buyers to purchase their home in just 1% increments, with a reduction on the fees charged.
Today we have confirmed plans to get more people onto the housing ladder by opening up #sharedownership to those moving into new social rented properties https://t.co/B7mpk8z4S0 pic.twitter.com/fUPUmdQkME
— Ministry of Housing, Communities and Local Govt (@mhclg) October 17, 2019
What is Right To Shared Ownership?
As well as the introduction of new measures for Shared Ownership, the Housing Secretary has also confirmed support for Housing Association tenants, allowing those renting to buy a share of their property under the new Right To Shared Ownership scheme. Tenants can buy an initial 10% stake, then pay subsidised rent on the remaining 90%. So, if the Home Association tenant was renting a home worth £200,000, they could make up the 10% stake of £20,000 with a £2,000 deposit and an £18,000 mortgage.
When will these changes come into effect?
The new Shared Ownership measures are expected to come into effect early next year, although this hasn’t been confirmed. Only time will tell how these changes will impact the property market.
We’re here for first time buyers
Are you looking to make the first steps on the property ladder? Let us help you find your dream home. Our team of residential estate agents can advise you on the best ways of buying your first home within your budget. Call us on 01702 343060 or contact us here.
Plus, don’t miss our top tips on how to buy your first home.