Article
05 September, 2019
Over the past decade, there has been a rise in the popularity of affordable housing schemes due to the affordability barriers present in many cities across the UK. The barriers have caused numerous aspiring first-time buyers, to approach housing associations who offer shared ownership schemes to help them step onto the housing ladder. To help tackle the affordability barriers many local governments have pledged to increase housing supply and the Ministry of Housing, Communities & Local Government supports these pledges.
On 28 August 2019 the Ministry of Housing, Communities & Local Government published a discussion paper entitled 'Making home ownership affordable' which seeks to propose a new national model for shared ownership, to enhance affordability and utilise the flexibility the current scheme is designed to offer.
The consultation comes at a time of political instability yet the Government have announced various new measures to tackle the housing crisis and is for registered providers, local authorities, tenants, lenders and all other stakeholders with an interest in social housing to comment on.
Proposed Changes to Shared Ownership
The principal focus of the paper is four key changes that will improve shared ownership for all involved in the scheme.
Together with the discussion paper, the government has introduced a change that lets individuals purchasing a property under the Help to Buy: Shared Ownership scheme to take out a 35 year mortgage. Currently, Help to Buy: Shared Ownership owners cannot take out a mortgage that goes beyond 25 years after the property was originally purchased. Although this change means purchasers will have to pay more interest over the life of their mortgage than if they opted for a 25 year mortgage, it opens up the Help to Buy re-mortgage market for lenders and brings lower monthly repayments. This in turn will give purchasers more flexibility in their monthly budget, which could mean the difference in being able to afford to buy and getting out of rented properties.
The consultation closes on 29 September 2019 and responses should completed via the online portal.
For more information contact Aisha Bhailok in our Housing & Regeneration department via email or phone on 0333 207 1130. Alternatively send any question through to Forbes Solicitors via our online Contact Form.
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