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What is the new Shared Ownership lease?
When you are choosing your new home, it may be under the terms of the new Shared Ownership lease.
The "new Shared Ownership lease" refers to the updated terms and conditions governing Shared Ownership properties in England. Introduced by the government, these changes aim to make Shared Ownership more transparent, affordable, and accessible to a wider range of individuals.
This new Affordable Homes Programme (AHP) will see a £12 billion investment into the housing sector, providing up to 180,000 new homes across the country.
As part of this new programme, there were some notable changes to the Shared Ownership scheme which were put in place to help more people get onto the property ladder. These changes included:
Previously, you usually had to buy at least 25% of the property. Now, the minimum initial share has been lowered to 10%, making it much more accessible if you have a smaller deposit or lower income.
The introduction of a 10-year repair warranty during which the shared owner will receive support from their housing provider/landlord to pay for essential repairs up to £500.
Staircasing is the process of buying more of the property to reduce your rent. The new lease makes this easier as you can now staircase in 1% increments every year for the first 15 years.
There are no valuation fees for 1% staircasing and you do not need to pay for a RICS surveyor. Instead the price is based on the House Price Index (HPI).
If you want to buy more than 1%, the minimum standard jump has been reduced from 10% to 5%.
Older shared ownership leases were often 99 or 125 years.
All new Shared Ownership homes must now have a minimum lease term of 990 years. This effectively removes the need for expensive lease extensions in the future.
If you decide to sell in the old model, landlords had 8 weeks to find a buyer before you could sell on the open market. This has been cut down to 4 weeks, giving you more control over the sale if the landlord can't find a buyer quickly.
The intention of this new model is to be more consumer friendly, easier to access and allow shared owners to increase the stake in their home in a more manageable and affordable way.
It's important to note that the new lease is only for specific homes so please ask your sales consultant for more information.