New funding model announced to boost Shared Ownership in London
Posted 11 December 2015 by Keith Osborne
House-hunters hoping to see more Shared Ownership new homes for sale in London have been given a boost by Mayor Boris Johnson as he announces 1,000 new properties to be developed under a pioneering private sector funding model.
Johnson has allocated £45m from the First Steps Challenge Fund to develop two schemes with Chaco Limited and the London Borough of Barking and Dagenham, with a further £120m from the private sector adding to the loan funding.
The First Steps Challenge Fund is aimed at attracting investment from financial institutions such as pension funds and insurance companies to build Shared Ownership housing for low- and middle-income people in London.
The London Borough of Barking and Dagenham scheme will result in up to 500 new Shared Ownership homes across the borough by 2020. The Greater London Authority (GLA) will contribute £22.5m to the development, with pension funds and other institutional investors adding even more money to the project, and the loan repaid within 15 years, with interest.
The second investment will build 500 more new Shared Ownership homes across London in partnership with Chaco Ltd, an organisation that provides institutional non-bank funding for housing associations and registered housing providers. Chaco is currently working with housing association Genesis to work out how the new properties will be delivered. Again, £22.5m will come to the project from the GLA, further boosted by other private funding.
Johnson says: “This scheme is a brilliant way to open up homeownership to Londoners on modest incomes, making the first step on the property ladder just that little bit easier. We've already helped 52,000 Londoners to buy their first home and realise their dream, and I'm very pleased that the first institutional investors have come on board through my First Steps Challenge Fund. This is a great vote of confidence in a housing model which is incredibly popular with consumers, and we need to see more of it in London.”
The 52,000 people mentioned by Johnson have been assisted by the Mayor’s First Steps programme and he has already stated his aim of doubling the number of Shared Ownership homes in London by 2020.