Changes to Shared Ownership Eligibility from April 1st 2016
As of the 1st April 2016 there are two important changes to Shared Ownership eligibility within London. The changes open up Shared Ownership to even more Londoners and remove some of the previous restrictions. Thousands of people could benefit from an extension to the Shared Ownership scheme, which allows people to part buy and part rent their home and watch their equity grow over time.
What are the changes to Shared Ownership Eligibility?
- The maximum household income threshold has been increased to £90,000 per year. If you (together with anybody you are looking to buy a home with) have an annual household income below £90,000 then you may be eligible for Shared Ownership. This threshold will apply to all households regardless of property size.
- A lower income threshold (£80,000) is applicable for developments outside London boroughs.
- There is no longer a restriction on the number of bedrooms within the property you wish to buy. Previously Shared Ownership purchasers were eligible to apply for properties with up to one extra bedroom than the household size required. Now, as long as you can afford it, you can apply for properties with as many bedrooms as you wish.
The eligibility criteria for Shared Ownership has been relaxed as part of the Governments initiative to help a million more people into home ownership which includes the investment of £4billion to build an additional 135,000 Shared Ownership homes.
Shared Ownership is a part buy part rent purchasing scheme aimed at helping first time buyers get a foot onto the property ladder. Through Shared Ownership, purchasers buy an initial share in their property (usually 30%) and pay rent on the remaining percentage allowing purchasers to own equity in their own property.
It also means that by buying a share rather than the full value of a property, the mortgage required is often a lot smaller than that needed on the open market and with that, the deposit required which is often the stumbling block for many first time buyers.
It is estimated that due to the relaxing of the eligibility criteria, around 175,000¹ additional people will benefit and be able to apply for Shared Ownership across the country.
Communities Secretary Greg Clark said: “We’re determined to ensure that hardworking people right across the country once again see home ownership as an achievable ambition to achieve.
Shared Ownership schemes have proved a real help to first-time buyers, but punitive restrictions have locked too many out of this opportunity to buy. These changes will open the door for thousands of people across the country to own their own home.”
Housing Minister Brandon Lewis said: “We believe that anybody who works hard and aspires to own their own home should have the opportunity to realise their dream. Shared Ownership is a great way for people to achieve that with just a fraction of the deposit they would normally need.
Now thanks to our vision thousands more people will be able to benefit from this scheme. It’s all part of a national crusade to turn generation rent into generation buy, helping one million more people into homeownership.”
If the relaxing of Shared Ownership rules means you are now eligibile under the affordable housing scheme, then the first step is to find a property you are interested in using our property search.