Changes to the shared ownership scheme
Buying a house can be a difficult and demanding process. In an attempt to make this process
easier and to help more people get onto the property ladder, the Government have recently
unveiled a number of measures.
A review of the shared ownership scheme is amongst these measures. The new scheme will
allow homeowners to reduce their monthly mortgage repayments by spreading their borrowing
over a longer period.
What is a shared ownership scheme?
A shared ownership scheme helps first time buyers or those with lower funds make those initial
steps onto the property ladder. This is done by purchasing a share of a property. By a process
called “staircasing”, you are then able to increase the share up to 100% and own the lease of
How does a shared ownership scheme work?
By purchasing a 25% – 75% share of a property rather than the whole property, the buyer can
pay less or secure a lower mortgage. They have to pay rent on the other share to the housing
association from which the property is being bought, and over time they can “staircase” up to
owning the full property.
The Ministry of Housing gave the example of:
“ A family in a £200,000 shared ownership 3-bedroom property could buy an initial 25% stake
with a mortgage for £50,000 while paying subsidised rent on the remainder. They would then
have to save up £20,000 at a time to increase their stake, and decrease their rent”
However, with the plans for a new national model for shared ownership, people will be able to
buy their home in 1% chunks – rather than being forced to save up 10% at a time. This means
that in the example above, you could buy 1% shares of your property for £2000, instead of
20,000 for 10%.
Why make these changes?
On the day he became Prime Minister, Boris Johnson made the promise to "help a new
generation to own their own home". By making these changes to the shared ownership
schemes it means that people who can’t afford to buy more expensive properties or can’t secure
higher mortgages can get onto the property ladder earlier, with greater flexibility in terms of how
they achieve the property purchase.
Housing Secretary Rt Hon Robert Jenrick MP also 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.”
How we can help!
If you’re looking to get onto the property ladder, we have a variety of great homes
to suit you!
We’ve also put together a helpful guide on “Buying a House”
so that you can have fun choosing
your dream home, rather than being bogged down by the stress of fees and paperwork!