David Cameron is to announce an easing of the rules of the government’s shared home ownership scheme to allow people to benefit more than once as they move up the property ladder.
As he outlines his record in implementing the Tory manifesto, the prime minister will pledge to end the heavy restrictions on the shared ownership scheme.
In a speech in which he will declare that an election manifesto should be a checklist rather than a wishlist, the prime minister will say that the shared ownership scheme will benefit an extra 40,000 people – up from 135,000 to 175,000.
Under the scheme, people who have a steady income but low savings can buy a stake of 25% to 75% of a property using a deposit and a mortgage. They then pay rent on the remaining share, which is owned by a housing association. The rent can be up to 3% of the association’s share of the value of the property.
All households earning less than £80,000 in England or £90,000 in London are eligible for the scheme, which is modelled on proposals drawn up by Iain Duncan Smith, the work and pensions secretary.
The prime minister will say that current rules preventing people from benefiting from the scheme to “part-buy, part-rent properties” more than once will be scrapped. The change will mean that as people have children, or their circumstances change, they will be allowed to use the scheme to move up the property ladder. Rules which limited the scheme to key workers will also be scrapped.
The prime minister will 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.”
