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Changes to shared ownership ‘will help more people buy a home’
The government is planning changes to the shared ownership scheme to make it easier for people to buy more of their own home, including allowing them to buy in 1% increments. Linsey Hayes Conveyancer provides an update.
At present, they have to buy an increased share in 10% chunks, which can be as much as £45,000 each time. This process of increasing the stake until the property is bought outright is known as “staircasing”.
People use shared ownership to buy a proportion of their home – which can be as little as 25% – and then pay a subsidised rent on the rest.
The government published these case studies to explain how the changes will help:
How will it work?
£150,000 shared ownership property
- A family in a £150,000 shared ownership 2-bedroom property could buy an initial 25% stake with a mortgage for £37,500 while paying subsidised rent on the remainder.
- They would then have to save up £15,000 at a time to increase their stake and decrease their rent – which is beyond the reach of many.
- Under the new arrangements, shared owners would be able to save up 1% at a time – or £1,500.
£200,000 shared ownership property
- 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 – which is beyond the reach of many.
- Under the new arrangements, shared owners would be able to save up 1% at a time – or £2,000.
£450,000 shared ownership property
- A family in a £450,000 shared ownership 4-bedroom property could buy an initial 25% stake with a mortgage for £112,500, while paying subsidised rent on the remainder.
- They would then have to save up £45,000 at a time to increase their stake and decrease their rent – which is beyond the reach of many.
- Under the new arrangements, shared owners would be able to save up 1% at a time – or £4,500.
We shall keep clients informed of developments.
If you would like more information about the legal aspects of buying or selling a home please contact Linsey Hayes on 016979 27012.
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