Govt pledges to get more people on housing ladder in shared ownership changes

Moves promised by Boris Johnson to “help a new generation to own their own home” are being unveiled by the government.

The new Housing Secretary, 37-year-old Robert Jenrick, is announcing a new shared ownership scheme to help young people and lower earners on to the housing ladder.

But Labour has already dismissed the government’s initiative, claiming “tinkering with shared ownership is meaningless when low cost homes aren’t being built”.

One of Mr Johnson’s pledges in his speech in Downing Street on the day he became Prime Minister five weeks ago was “giving millions of young people the chance to own their own home”.

And in his barnstorming speech at the Tory conference last October he said: “It is a disgraceful fact that we now have lower rates of owner occupation – for under-40s – than the French or the Germans.

“That reflects the failure of governments for the last 30 years to build enough housing.

“But it is also a massive opportunity for us Tories.”

Now Mr Jenrick, who won a big promotion when Mr Johnson became Prime Minister and became the first Cabinet minister born in the 1980s, is announcing:

• A new national model for shared ownership to help thousands of lower earners step onto the housing ladder;
• People will be able to buy their home in 1%t chunks – rather than being forced to stump up 10% at a time;
• And changes to Help to Buy to make it easier for people to take out a mortgage.

Mr Jenrick told Sky News: “Building the houses this country needs is a central priority of this government.

“We know that most people still want to own their own home, but for many the dream seems a remote one.

“My mission is to increase the number of homes that are being delivered and to get more young people and families onto the housing ladder, particularly those on lower incomes.

“That’s why I am announcing radical changes to Shared Ownership so we can make it simpler and easier for tens of thousands trying to buy own their own home.

“Help to Buy, the cut to Stamp Duty and our home-building programmes are already making a real difference, but I am clear we need to go much further if we are to make the housing market work.

“I will be looking at ensuring young people from Cornwall to Cumbria aren’t priced out of their home areas and how we can build public support for more house building and better planning.

“This government will help a new generation to own their home.”

Under Mr Jenrick’s proposals:

• A family in a £450,000 shared ownership four-bedroom property could buy an initial 25% stake with a mortgage for £112,500, while paying subsidised rent on the remainder.
• They would then have to stump up £45,000 at a time to increase their stake, and decrease their rent – which he claims is beyond the reach of many.
• Under the Government’s plans, shared owners would be able to stump up 1% at a time – or £4,500.

At present, buyers have to purchase an increased share in their home in 10% chunks, which can be as much as £45,000 per time.

This process of increasing the stake until the property is bought outright is known as “staircasing”.

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People use shared ownership to buy a proportion of their home – which can be as little as 25% – and then pay a subsidised rent on the rest.

But dismissing the proposals, Labour’s shadow housing minister Sarah Jones claimed: “Tinkering with the details of shared ownership is meaningless when lack of investment from government means low cost homes for ownership simply aren’t getting built.

“The Tories have failed to deliver the low-cost homes we need to get people on the housing ladder. Just 1% of all homeowners have accessed shared ownership, and the number of these and other low-cost homes being built each year has almost halved since its peak under Labour.

“The Conservatives’ ‘affordable’ housing is increasingly out of reach for people on lower incomes. Labour will introduce a new affordability standard, with revolutionary new FirstBuy homes: discounted homes with mortgage payments set at no more than a third of incomes.”

(c) Sky News 2019: Govt pledges to get more people on housing ladder in shared ownership changes