Published 06 Dec 2018
Changes to Affordable Home Ownership
Shared Ownership allows people to buy a share of a home – rather than the whole property – and then buy a greater share over time when they can afford to. They pay rent on the rest of the property.
Previously, these were allocated in several different ways, including criteria set by local councils. For example, whether potential buyers worked in the local area or if they were already in council housing. This now has changed.
We’ve asked one of our panel mortgage advisers, De Havilland Group Limited, to discuss the Government's announcement of the following measures to boost affordable home ownership.
Shared Ownership rules relaxed
Shared Ownership limits have been lifted so that anyone who has a household income of less than £80,000 outside London, and £90,000 inside London, can buy a home through Shared Ownership. Only military personnel will be given priority over other groups. The scheme applies across England.
You can buy a share between 25% and 75% of a home. The rent on the rest of the property won’t be more than 3% of the amount left.
London Help to Buy
Previously, if you were able to pay at least 5% of the value of your home as a deposit, the government would lend you up to 20% of the value of the property, alongside your mortgage of up to 75%. Now, if buying a home in London, the government has increased the upper limit for the equity loan it gives new buyers within Greater London from 20% to 40%.
With London Help to Buy equity loan:
- you’ll need to contribute at least 5% of the property price as a deposit
- the government will give you a loan for up to 40% of the price
- you’ll need a mortgage of up to 55% to cover the rest
Housing association tenants able to buy their homes
Previously, most people who rent a council home had the right to buy their home from the local authority. There were discounts on the home price available in many cases, depending on how long people had lived there.
Right to Buy will now be extended to housing association tenants, giving 1.3 million households the chance to become home owners.See more ways to buy a home with Peabody