Changes to shared ownership to help more people get on the property ladder
This week, the Advantage team has been taking a look at the new package of measures which have been unveiled by Housing Secretary Robert Jenrick to help people on lower incomes to get onto the housing ladder.
The government will review a new national model for shared ownership to make it easier for people to buy more of their own home, including allowing them to buy in 1% increments.
At present, people who’ve bought under the shared ownership scheme have to buy an increased share in 10% chunks, which can be as much as £45,000 per time. This process of increasing the stake until the property is bought outright is known as “staircasing”.
People use shared ownership to buy a proportion of their home – which can be as little as 25% – and then pay a subsidised rent on the rest.
Housing Secretary Rt Hon Robert Jenrick MP said:
“Building the houses this country needs is a central priority of this government. We know that most people still want to own their own home, but for many the dream seems a remote one.
“My mission is to increase the number of homes that are being delivered and to get more young people and families onto the housing ladder, particularly those on lower incomes.
“That’s why I am announcing radical changes to shared ownership so we can make it simpler and easier for tens of thousands trying to buy their own home.
“Help to Buy, the cut to Stamp Duty and our home-building programmes are already making a real difference, but I am clear we need to go much further if we are to make the housing market work.
“I 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.”
The Housing Secretary also announced he will look to reform the planning system to increase housing delivery and make home ownership more affordable for people looking to buy their first property, particularly in areas which are least affordable.
This could include increasing the number of homes sold at discounted prices to people trying to get onto the property ladder, boosting homeownership and helping build local support for new development.
Homeowners buying a property under Help to Buy will be given new freedoms which will make it easier to take out a 35-year mortgage.
The government has also closed a loophole with immediate effect that prevented people from taking out a mortgage with a term of more than 25 years.
The change means homeowners can reduce their monthly mortgage repayments by spreading their borrowing over a longer period.
Regular readers of the Advantage blog will know that we’ve been looking at a wide array of proposed solutions to the under-supply of affordable housing and in a feature for PBC Today, James Topping looked at how the private rental sector is offering increasingly sophisticated options for serial renters. He concluded:
“As Generation Rent grows up, they’ll need more space and a different type of amenity as they start to grow their families. Will the sector grow with them, and begin to offer state-of-the-art baby changing facilities and pram storage – or will it continue to cater mostly to the 20 and 30-somethings it does now?”
It seems unlikely that any one solution will help everyone who wants to to achieve home ownership. However, as developers, architects, landlords, local and central government, planners and social housing associations continue to offer innovative ways to create affordable housing, both for sale and for rent, we’re cautiously optimistic that some progress is being made.
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This week, us at Advantage Home Constuction Insurance learnt that construction output has boosted the GDP for Wales.
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