As his first major move in the job, Housing Secretary, Robert Jenrick has revealed plans that would help more first-time buyers get onto the property ladder. The plans involve overhauling the shared ownership scheme, allowing people to increase their home share in smaller increments.
Shared ownership increments
Under the current model, homeowners who have bought through a shared ownership scheme are only able to buy back the government-owned part of their property in 10% increments. Jenrick has said that he would like to change this so that homeowners would be able to increase their stake by just 1% at a time. The Guild of Property Professionals, CEO, Iain McKenzie, says: “A 10% jump for many is just too much, especially in expensive areas, whereas 1% increments will be far more financially manageable and will help shared-ownership buyers work towards owning their property outright. Considering that shared ownership buyers have to pay rent on the government-owned portion of their property, it is important for them to have a plan in place to increase their share of ownership over time. Smaller increments will make this more accessible.”
35-year mortgages on Help to Buy
Jenrick also announced that he would make the Help to Buy incentive more affordable by enabling buyers to take out 35-year mortgages. A loophole had prevented buyers from taking a mortgage of more than 25 years, however, in the announcement the Government has said this has been rectified.
The changes are to ensure that younger generations will be able to own property. “We 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 housebuilding and better planning,” says Jenrick. “This Government will help a new generation to own their home.”
McKenzie adds: “Any changes that would help people get onto the property ladder are welcomed. The upcoming generations have struggled to get their foot in the door, and any changes that could assist them would be good for the market and buyers who have been forced to sit on the side-lines because they simply could not afford to be a part of it.”
More house building
In addition to the shared ownership changes and mortgage terms, the minister also said that he would look into reforming the planning system with the goal of increasing housing delivery. "My mission is to increase the number of homes that are being delivered and to get more young people and families on to the housing ladder, particularly those on lower incomes,” said Jenrick. "Building the houses this country needs is a central priority of this Government.”
“The country has faced a housing shortage for some time, so further effort from the Government to address this is needed and overdue,” says McKenzie. “Hopefully Jenricks changes will open doors to many more first-time buyers and drive activity in that sector of the market,” he concludes.