The Prime Minister, David Cameron, is set to announce a change to regulations surrounding the shared home ownership scheme in order to allow individuals to utilise it more than once as they progress up the housing ladder.As he sets out his success in sticking to his government’s manifesto pledges, David Cameron will commit to ending the sizeable restrictions on the shared home ownership initiative.
The prime minister will state that election manifestos should be a checklist instead of merely a wishlist. He will go on to say that the changes to the shared ownership scheme will benefit about 40,000 more people; this will take the total to 175,000 from 135,000.
The initiative means that individuals who have a dependable income but a low level of savings can purchase a share of 25% to 75% of a property via a deposit and a mortgage. After they have done this, they can pay rent on the remaining part of the property, which will be owned by a housing association. The level of rent can only go up to 3% of the value of the association’s stake in the property.
The scheme is largely based on ideas put forward by the work and pensions secretary, Ian Duncan Smith, and is available to all households in England that have a total income of less than £80,000. Households in London have an upper limit of £90,000.
The key change that David Cameron will announce is the removal of a regulation that stops individuals from benefitting more than once. The benefit of this change is that it allows people to move to different properties as their situation changes- having children is one of the main example stated. The scheme will also now be open to people who are not key workers.
David Cameron is expected to say:
“For years, we ‘ve had shared ownership, where you part-buy, part-rent a property. So many people are attracted to this idea, especially those who thought they ‘d never have a chance of owning a home. But, because it ‘s been heavily restricted, many of those people have missed out. We ‘ve had local councils dictating who is eligible, based on everything from salary to profession to where the buyer comes from.
“From April next year, that will make 175,000 more people eligible for home ownership. It means some people will be able to buy a house, for example, in Yorkshire, with a deposit of just £1,400. It will be opened up to people of any occupation, the only restriction being that you have to earn under £80,000, and £90,000 in London.”
The move is thought to be part of David Cameron’s “crusade” to provide the country with a higher level of affordable housing. It has been widely reported that the UK’s housing crisis is only getting worse because of a huge demand for property that is not currently being matched by the supply of new properties being brought onto the market.