Shared Ownership Week - Policy change means 175,000 more families eligible
Posted 15 September 2016 by Ben Salisbury
The decision by the Department for Communities and Local Government to raise the upper income limit for people applying to buy a share of a property through the government’s Shared Ownership scheme will make about 175,000 more families eligible to buy.
The changes mean that councils will no longer be in charge of deciding who can apply for a Shared Ownership property. Previously the local council would usually be able to decide who had priority, with those living or working in the area usually being selected but the new rules mean any household with an income of £80,000 or less or £90,000 or less can apply and the scheme will allow applications from people in any occupation.
Statistics show that in some parts of the country, a deposit of less than £1,000 could get a buyer part-ownership of a one-bedroom flat. For instance, in the East Midlands, an average priced one-bedroom flat costs £72,500. To buy a 25% share, a buyer would need a 5% deposit on £18,125, which means they would only need to find £906 as a deposit.
Shared Ownership allows people to purchase a share of a home and rent the rest, buying more through a process called ‘staircasing’ as and when they can afford it. Usually the buyer of a shared ownership home will buy between 25% and 75% of the home paying a mortgage on the owned share and renting the rest.
Housing and planning minister Gavin Barwell said: “As a government that works for everyone, we believe people who aspire to own their own home should have the opportunity to realise their ambition. We've already helped hundreds of thousands of people become homeowners through government-backed schemes and want even more people to benefit from Shared Ownership in the future.”
Since 2010, around 41,000 Shared Ownership homes have been built and the changes to the programme mean this figure will be more than trebled.
The government’s latest figures show that more than 309,000 households have benefitted from government-backed ownership schemes such as Right to Buy, Help to Buy and Help to Buy: Shared Ownership.
New rules mean that the scheme will be opened up to people of any occupation as well as changing the income limit.