Government reforms shared ownership and Help to Buy

Posted on Friday, August 30, 2019

 

 

Housing secretary Robert Jenrick has unveiled reforms to shared ownership and Help to Buy designed to make the schemes more accessible for borrowers.

Home buyers using shared ownership schemes will be able to increase their share of the property in smaller increments of just 1 per cent.

Until now home owners wishing to buy a larger proportion of the property through a process known as “staircasing” have had to do so in segments of at least 10 per cent at a time.

The current system means home buyers sometimes have to find as much as £45,000 if they wish to increase their share.

In addition to the shared ownership reforms, the government is also closing what it calls a “loophole” in the Help to Buy scheme, which means that borrowers cannot get mortgages for terms longer than 25 years.

Following the reforms borrowers should be able to take out mortgages of up to 35 years, in common with many first-time buyers in the mainstream mortgage market who are increasingly opting for longer repayment terms to reduce their monthly costs.

Jenrick also pledged to look at reforming the planning system, particularly in areas where affordability is at its toughest.

The government says this may include increasing the number of homes sold at discounted prices to people trying to get onto the property ladder.

Jenrick says building more homes is a “central priority” of the government.

He says: “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.”

He adds: “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.”

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