The government has confirmed plans to set up a new shared ownership Right to Buy scheme for housing association tenants, which could see residents pay as little as £2,000 to own part of their home.
Last month at the Conservative Party conference, housing secretary Robert Jenrick announced he would be looking into plans to give tenants the opportunity to buy as little as a 10% stake in their home.
This morning, Mr Jenrick confirmed the plans, saying the measures would mean more residents would be given the opportunity to buy a stake in where they live.
Under the plans, housing association tenants in new housing association properties will be given the automatic Right to Buy a share of their home, with the ability to increase that share in increments over time.
According to the government, this could see some housing association tenants taking a stake in their home for a deposit payment of only £2,000.
The government will also work with housing associations on a voluntary basis to see if the plan could be extended to existing stock.
The plan has already been met with some criticism from the sector, with some housing bosses raising concerns on the impact that the plans would have on associations’ ability to borrow.
Housing associations are able to borrow money at low rates because of their dependable stream of income through social rents.
Some believe that the prospect of their homes being converted into shared ownership may risk compromising that certainty, and lead to an increase in borrowing costs.
In an interview with Inside Housing, Mr Jenrick said he had been in discussions with bosses from several big banks to discuss how it would apply to existing stock. He also said he believed a small increase on the number of properties subject to shared ownership was unlikely to make a material difference on how housing associations can borrow.
The introduction of the new shared ownership Right to Buy comes as part of wider reforms to the shared ownership model being introduced by Mr Jenrick.
In August, he announced he would be trying to create a “new national model of shared ownership”, including the ability for shared owners to staircase – increase their equity stake in a property – in chunks of 1%.
Mr Jenrick has said that the changes will also ensure that costly and lengthy staircasing processes such as high valuation fees are reduced with a new streamlined process replacing the current system.
The plans will also see the government attempt to streamline the resale process for shared owners that have staircased 100%, making it easier for them to sell.
Commenting on the announcement today, Mr Jenrick said: “Many people want to own their home, but can’t see a route towards achieving that goal.
“This government is determined to help people realise that ambition and boost ownership for thousands of hard-working people up and down the country.
“Owning a home is not just about the four walls around you, it’s about investing in your family, saving for the future and putting down roots in a community.”
Sorce: Insidehousing
