A new model of shared ownership will help housing association tenants - often those on the lowest incomes - get on the property ladder, the Government has announced.
A new version of scheme will make it easier for first-time buyers to own a own home - by allowing them to buy just a 10% stake that can then be upped in 1% increments, housing secretary Robert Jenrick said.
The extension of the model will give thousands of social tenants an opportunity to purchase a stake in a home - instead of just renting.
And in some areas, it will mean people can get on the housing ladder with deposits as low as £2,000.
For tenants in new housing association properties, there will be an automatic right to buy a share of their home from 10%, with the ability to increase that share over time, up to full ownership.
"In addition to this, further measures to make shared ownership homes have also been confirmed," the Government said.
This involves cutting the minimum initial stake from 25% to 10%, giving those on lower incomes the chance to own a stake in their property.
Right To Shared Ownership - how it'll work
Currently a Housing Association tenant renting a £200,000 property cannot buy a share of that property.
However, under Right To Shared Ownership, the tenant will be able to buy an initial 10% stake worth £20,000, while paying subsidised rent on the remaining 90% of the property.
This means the tenant could make up this 10% stake through a £2,000 deposit and a £18,000 mortgage.
A new model for Shared Ownership
The scheme's extension is part of plans to improve the overall model for Shared Ownership - making it easier for the public to save and buy equity in their home – so-called ‘staircasing’.
It will also make it easier for people to buy in smaller chunks - which they can then build on as their incomings increase.
Smaller share purchases will make it easier for people to save the money required to buy additional shares, removing the need to secure mortgage finance or pay fees to the lender.
Mark Hayward, Chief Executive of NAEA Propertymark, said: “Now that the measures on shared ownership have been confirmed, thousands of consumers will welcome the opportunity to increase their share of ownership more easily and to simplify the process by which they can sell their homes.
"Whilst we support introducing creative ways for consumers to get on to the housing ladder, the Government must be careful of the unintended consequences that any changes to Help to Buy could have on the rest of the market.
"In many cases these are not properties that feed into the general market place but into a cul de sac with no assistance to upward activity.”
