The Government is aiming to encourage more first-time buyers onto the property ladder by making it easier to progress through the stages of shared ownership, reported Property Wire on the 28th of August.
Until now so-called “staircasing” to buy a greater share in a shared ownership home, buyers have needed to purchase parcels equivalent to 10% of the property’s value. The new proposals aim to allow:
- purchases of just 1% shares in the home; and
- modifications to the Help to Buy scheme, so that first-time buyers have easier access to the mortgages they need.
Shared ownership may start with the purchase of as small a share as 25% of the property’s value and an affordable rent is paid on the remainder. With buyers currently expected to purchase further shares in 10% parcels, each step in the staircasing process may cost as much as £45,000. The proposed facility buying further 1% shares may, therefore, reduce the cost of such an example to just £4,500 a time.
The Help to Buy scheme is also being amended to allow 35 instead of 25-year mortgages, so spreading the monthly repayment costs, and providing a further incentive for first-time buyers to purchase a home of their own.
The new Housing Minister Robert Jenrick describes the change as a radical step towards encouraging young people and their families – especially those on low incomes – to get on to the housing ladder. The new approach to shared ownership, the Help to Buy scheme, potential cuts in Stamp Duty, and the government’s housebuilding programme all have this objective in mind.
