Finance News

Government announces shared ownership overhaul

Additionally, homeowners buying through Help to Buy will be given new freedoms which will make it easier to take out a 35-year mortgage.

Rozi Jones
|
28th August 2019
Houses house of parliament commons government govt gov
"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."

Housing Secretary Robert Jenrick has today announced plans for a new model for shared ownership in a bid to help more lower earners onto the housing ladder.

As part of the changes, people will be able to buy their home in 1% increments rather than having to save up 10% at a time.

The Housing Secretary also announced he will look at reforming 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.

Additionally, homeowners buying a property through Help to Buy will be given new freedoms which will make it easier to take out a 35-year mortgage.

The government has closed a loophole with immediate effect that prevented people from taking out a mortgage with a term of more than 25 years.

Housing Secretary Robert Jenrick 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."

Sarah Guershon, mortgage expert at Bankrate, commented: "Help to Buy and shared ownership have helped thousands get onto the property ladder who otherwise could not have afforded to, and we welcome proposals from the new Housing Secretary to improve these schemes. But these are only small steps towards what should be a much bigger goal. To those for whom home ownership seems unaffordable, it's unlikely to make a big enough difference.

"Help to Buy and shared ownership properties are in limited supply and, as new builds, often come at a price premium. With shared ownership properties in particular, this means that it's possible to end up spending the same amount of money buying a given share of a home, compared to owning a whole non-Help to Buy property.

"And while it's positive to see Mr Jenrick looking to make changes so early on in his tenure, there's still a huge amount to be done to solve the UK housing crisis. We hope the steps he has taken today will be just the start of big changes to the UK housing market, because nothing short of bold reform will solve this problem."

Related articles
More from Finance News
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.