The Government is planning to launch a new help to buy scheme in a bid to help lower earners climb onto the housing ladder.
Announcing the move this month, the Housing Secretary Robert Jenrick said the new national model for shared ownership will make it easier for people to buy more of their home.
Under the plans, social tenants moving into new homes will be empowered to buy a share of the property, with minimum initial stakes starting at just 10 per cent.
This is compared to the current model in which tenants must buy at least 25 per cent of the property.
Likewise, the new scheme will enable social tenants to buy chunks of the property in one per cent increments.
According to the Government, the new scheme will allow people to get on the housing ladder with deposits “as low as £2,000” and a mortgage of £18,000 on a property worth at least £200,000. The tenant would then pay rent on the remaining 90 per cent of the property, buying shares as and when they can afford to.
“Many people want to own their home, but can’t see a route towards achieving that goal. This government is determined to help people realise that ambition and boost ownership for thousands of hard-working people up and down the country,” said Mr Jenrick.
“These measures announced today will mean more people, including residents living in new housing association homes, are given the opportunity to get on to the housing ladder.”
For more information on how the new scheme would work, please click here.
Ian West, Partner for Carter Lemon Camerons LLP said: “Whilst shared ownership provides a way for more people to get onto the property ladder, there are additional legal points to consider as compared with an outright purchase of a leasehold flat which make it even more important to obtain good legal advice before entering into shared ownership arrangements.”
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