Shared ownership to lead new affordable home growth in England

Developers are now able to bid for a share of the government’s £12bn fund to build social and affordable homes in England.

The 2021 to 2026 programme includes £11.5bn of ‘new’ money and is expected to deliver up to 180,000 new homes.

Significantly, the government has said that half of these homes will be made available through a ‘revamped’ shared ownership scheme with the aim of helping buyers onto the property ladder. In addition, eligible tenants of rented properties built through the fund will have the right to apply for shared ownership, with a few specific exceptions.

The announcement marks a subtle shift in policy from previous funding which put more focus on social and affordable rental tenures.

Supported housing, which provides managed accommodation for the most vulnerable people, will be allocated 10% of the budget, while £7.5bn has been pledged by Homes England to areas outside London.

New shared ownership model announced

With 50% of fund to be allocated to shared ownership, and eligible tenants of rented properties given the right to apply, the government has placed greater stock in this tenure to enable more people to buy their own home.

A new model proposes to reduce the minimum initial share required and government will launch a consultation to “ensure new homes deliver the accessibility that families need” (see below).

The new shared ownership model:

  • Reduces the minimum initial share a purchaser can buy in a property from 25% to 10%
  • Allows people to buy additional shares in their home in 1% instalments (staircasing), with heavily reduced fees
  • Introduces a 10-year period for new shared owners where the landlord will cover the cost of any repairs and maintenance

Some homes will be exempt from the right to shared ownership, including:

  • Council homes
  • Homes in designated protected areas and rural exemption sites
  • Supported housing and alms houses
  • Homes where the landlord or freeholder is a Community Land Trust, or the landlord is a co-operative housing association

The following conditions apply for people applying for the right to shared ownership:

  • They must have been a social tenant for at least 3 years and lived in the current property for at least 12 months
  • Not be subject to bankruptcy proceedings
  • Demonstrate that they can afford and sustain homeownership. Prospective purchasers will need to undertake an affordability assessment

Consultation on raising accessibility standards

In terms of accessibility, all new build homes in England currently require four main areas for consideration:

  1. Level access to the main entrance
  2. A flush threshold
  3. Sufficiently wide doorways and circulation space
  4. A toilet at entrance level.

The government will consult on raising accessible housing standards further. A higher minimum standard would require additional features such as:

  • A living area at entrance level
  • Step-free access to all entrance level rooms and facilities
  • Wider doorways and corridors
  • Clear access routes to reach windows.

It would also include further features to make homes more easily adaptable over time to suit a wide range of occupants, including older people, those with reduced mobility and some wheelchair users. Our two-part blog series considers adaptable homes in more detail.

Read the government’s official press announcement here.

Social housing providers can find initial guidance on the Right to Shared Ownership model here.

Please Note: Every care was taken to ensure the information in this article was correct at the time of publication. Any written guidance provided does not replace the reader’s professional judgement and any construction project should comply with the relevant Building Regulations or applicable technical standards. However, for the most up to date LABC Warranty technical guidance please refer to your Risk Management Surveyor and the latest version of the LABC Warranty technical manual.

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