The government has announced plans to overhaul its shared ownership scheme claiming the move will enable thousands of lower-income earners to step onto the ladder.
Housing secretary Robert Jenrick says the proposed reforms will change the system of ‘staircasing’ that home owners face after they have bought a home through a shared ownership scheme.
Currently, they are required to buy back the government-owned part of their home in chunks of 10% which in expensive areas of the UK can mean paying £45,000 at a time.
Instead, Jenrick wants to reduce the ‘staircasing’ buy-back increments to 1% chunks. Shared ownership home buyers pay rent on the share of the property not covered by the deal until they have ‘bought back’ the property and own it outright.
Other measures announced by Jenrick include making Help to Buy more affordable by enabling buyers to take out 35-year-long mortgages.
“We will be looking at ensuring young people from Cornwall to Cumbria aren’t priced out of their home areas and how we can build public support for more house building and better planning,” says Jenrick.
“This government will help a new generation to own their home.”
But the plans haven’t gone down well at leading housing charity Shelter.
“Pinning his hopes on yet another complicated housing scheme is a worrying start for the new Housing Secretary of State,” says its Chief Executive Polly Neate.
“The government must realise that unworkable schemes, laden down with admin costs, are the wrong priority at any time – and are woefully inadequate when this country is facing the current housing emergency.”
Read more about shared ownership.