The government is changing the rules around shared ownership so buyers will only have to purchase a minimum stake of 10%.
People will also be able to buy additional shares in the property via instalments of 1%.
As it stands the minimum amount people can buy under shared ownership is 25% of the home, while they can only buy additional shares in instalments of between 5 and 10%.
Shared ownership works by having buyers purchase a proportion of a property, with the rest being rented from a housing association.
Kush Rawal, director of residential investment at Metropolitan Thames Valley, said: “Historically, restricting staircasing to larger shares has been a barrier for customers, so we welcome this move and further steps to reduce the costs of staircasing transactions.
“We passionately believe in the power of shared ownership as a key part of the affordable housing mix and want to see the number of shared ownership homes massively increased.
“Understanding and discussing with government the details of how the Right to Shared Ownership and the new 10-year leases covering repairs will operate will be crucial, as we must ensure that these measures support our shared aspiration to build more affordable shared ownership and affordable rented homes.”
Rico Wojtulewicz, head of housing and planning at the House Builders Association (HBA), the housebuilding division of the NFB, said: “We’ve seen these welcomed announcements before but who will deliver the homes? Homes England has a track record of saying they want to support SMEs but PLCs win a lot of the work.
“We must ensure the companies who will sustain the levelling up agenda, our SMEs, can compete for this pipeline of work.
“Access to the Home Building Fund is predicated on achieving planning. Therefore unless planning reform is delivered, the funds will not reach enough players and will be the preserve of the few.
“This reality even impacts Homes England, the governments housing body, which also remains at the mercy of the planning system and sees half of its sites without full planning permission.”
Lynda Clark, editor of First Time Buyer Magazine (www.firsttimebuyermag.com), said: “Today’s Affordable Homes Programme announcement is a significant step in supporting first time buyers across the country, with at least 50% of funding set to go towards affordable homeownership – in particular shared ownership.
“Shared ownership is a valuable product to first time buyers, yet despite having been around for decades, it has only recently become a popular method of getting onto the property ladder. This is a welcome decision from the government to invest in a proven homebuying product, which helps to cut the costs of buying a home and offers homeowners on a tight budget the security of homeownership.
“The property industry has waited with anticipation to see what will happen when Help to Buy ends in 2023 – and today’s announcement offers a positive boost to the market after a challenging period. In addition to investment in shared ownership, we will also now see the long-awaited pilot of the First Homes scheme.
“Far from the first=time buyer market grinding to a halt when Help to Buy ends, the government is investing wisely to deliver affordable housing at a national level and ensure the next generation of homeowners are supported.”
This post has originally been featured in Property Wire.