The Government are looking at new ways to get people on low incomes on the property ladder.
A review of a new model for shared ownership should allow more people to be able to buy more of their home including purchases with 1% increments. The new system is to be rolled out nationally.
Thousands of social tenants will be able to buy stakes in their homes, with those in some areas being able to get on the property ladder with a deposit of £2,000
As it stands, tenants of housing associations in properties worth £200,000 are unable to buy shares of the property.
The new measures would mean, the tenant of the same property can buy 10%, £20,000 with a reduced rent on the remaining 90%.
This could then be made up as a 10% stake with a £2,000 deposit and a £18,000 mortgage.
This is all part of the Governments plans of improving shared ownership and allowing more people to save money and buy more equity in their homes, sometimes known as ‘staircasing’.
Previously, ‘staircasing’ meant that consumers had a costly and / or lengthy with high valuation fees determining the price of the property. These fees will also be reduced to become more fair and proportional.
By being able to buy smaller shares, people will be able to save more in order to be able buy additional shares, reducing the need for mortgage finances and lender fees.
For those who still require a mortgage, there are plans for a preferred model for shared ownership making such mortgages easily available.
Housing Secretary Robert Jenrick said: “The government will work with housing associations on a voluntary basis to determine what offer can be made to those in existing housing association properties, so that the new Right to Shared Ownership is extended as widely as possible.”
We shall keep clients informed of developments.
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