Aspiring homeowners could get their foot on the property ladder for as little as £1500 following reforms to the shared ownership scheme, according to new figures from the government.
The government today confirmed details of its plan to ease restrictions on shared ownership as part of a campaign to turn generation rent into “generation buy”.
The scheme, set to be introduced in April, aims to give 175,000 aspiring homeowners the opportunity to get on the property ladder.
It will be opened up to people of any occupation and income caps will also be raised, meaning families earning up to £90,000 in London and £80,000 elsewhere could be eligible.
Under the new measures, a family in the North East for instance could need a deposit of £1563 to buy a 25% share in a typical shared ownership property in the region. The government estimates that this figure would be £2,000 in the South West, rising to £3438 in London.
Housing Minister Brandon Lewis said: “Shared ownership is a great way for people to achieve that with just a fraction of the deposit they would normally need. Now thanks to our vision thousands more people will be able to benefit from this scheme.
“It’s all part of a national crusade to turn generation rent into generation buy, helping one million more people into homeownership.”
Estimated deposit needed to buy a 25% share in a shared ownership property
| Property type | Typical shared ownership price | 25% share | 5% deposit on 25% share | |
|---|---|---|---|---|
| North East | 3 bed house | £125,000 | £31,250 | £1,563 |
| North West | 3 bed house | £153,000 | £38,250 | £1,913 |
| Yorkshire & Humber | 2 bed house | £115,000 | £28,750 | £1,438 |
| East Midlands | 2 bed house | £130,000 | £32,500 | £1,625 |
| West Midlands | 2 bed house | £135,000 | £33,750 | £1,688 |
| East of England | 2 bed house | £175,000 | £43,750 | £2,188 |
| London | 1 bed flat | £275,000 | £68,750 | £3,438 |
| South East | 2 bed flat | £190,000 | £47,500 | £2,375 |
| South West | 2 bed house | £160,000 | £40,000 | £2,000 |
Shared ownership allows people to part buy and part rent properties, increasing their ownership over time. It has been available since the 1980s but has been restricted with local councils dictating who should be a priority based on factors such as salary, profession or where the buyer comes from. Rules preventing people using the scheme more than once will also be abolished.
As part of a drive to put home ownership at the heart of its economic plan, the Chancellor revealed in the Autumn Statement the government will invest £8 billion to build 400,000 affordable homes.
This includes £2.3 billion to build 200,000 starter homes with 20% discounts for prospective buyers under 40. It will also commit £4 billion to housing associations, local authorities and private developers to build 135,000 homes as part of the Help to Buy programme. A further £1.6 billion has been earmarked to build 100,000 affordable homes for rent.
On top of this, the Help to Buy: Equity Loan scheme has been extended to 2021, with £8.6 billion to support 145,000 families into new homes.
Communities Secretary Greg Clark said: “Shared ownership schemes have proved a real help to first-time buyers, but punitive restrictions have locked too many out of this opportunity to buy.
“These changes will open the door for thousands of people across the country to own their own home.”
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