Two thirds of social housing tenants would like to buy a home, yet only a quarter believe they will ever be able to do so. That is why I have announced today the Government’s intention to reinvigorate the home ownership offer for social housing tenants, by introducing a new right to shared ownership.
This will help reduce the gap between ambition and expectation, and make home ownership attainable and affordable for many more social housing tenants. It is part of the Government’s wider commitment to support people and families from all backgrounds to realise their ambition to own their own home.
The right to shared ownership will give housing association tenants the right to purchase a share of the home they rent and to purchase further shares in future when they can afford to do so. Alongside this, the Government will also cut the minimum initial ownership stake from 25% to 10% for all shared ownership homes, making the tenure even more accessible for aspiring homeowners who are struggling to raise a deposit.
This will build on the Government’s existing proposals to introduce a new national model for shared ownership. This new model will be redesigned to work effectively for aspiring home owners in today’s housing market, for example, by allowing shared owners to buy further shares in smaller increments, cutting the costly fees charged for additional shares and introducing a standardised preferred model to improve mortgage availability. The combined package will make it much easier to buy an initial share and to purchase additional shares in order to build up to full ownership.
The Government intend to make the right to shared ownership available to tenants in all new social homes delivered with grant in the future. Future investment will be considered at a future fiscal event.
We will also work with the housing association sector on a voluntary basis to determine what offer can be made to tenants in existing homes, so that the new right to shared ownership is extended as widely as possible. The right to shared ownership will not apply to tenants living in existing local authority homes, who already have the statutory right to buy.