Residents in social and affordable housing can now apply for the chance to buy a share in their rental home.
Residents in social and affordable housing can now apply for the chance to buy a share in their rental home. This Government initiative is being called the Right to Shared Ownership scheme and aims to create new pathways to home ownership for tenants in the UK.The UK Government is positioning this scheme as an alternative route to homeownership focused on those who may have found home ownership too challenging when following traditional routes.
Lucy Frazer, Housing Minister, stated “All hard-working families and young people deserve the chance to live in a home of their own.” Through the scheme, tenants in affordable and social housing will be given the opportunity to own a share of their home. As part of their changed ownership status, the tenant will be required to pay monthly service charges on the building which will include maintenance charges.Right to Shared Ownership Scheme - In summary
- This opportunity is not yet available in Scotland, Wales or Northern Ireland
- Tenants will be able to buy a share worth 10%-75% of their property if it is their main home
- Being a shared owner, the tenant will gain more control over the property than as a tenant
- The tenant will be required to take out a mortgage while continuing to pay rent on the remaining equity - consequently this will increase living costs for the tenants
Which homes are eligible?
- The home must be listed as eligible with the Right to Shared Ownership Scheme, landlords will be able to inform their tenants if the property is eligible
- The property must be the tenant’s main or only home
- The tenant has lived in the property for at least 1 year
- The tenant has lived in social or affordable housing for at least 3 years
Depending on the success of the new policy, the Government hopes to make this scheme available for more tenants in the coming years.
Information for landlords
- As a leaseholder, the tenant will be liable to pay service charges for maintenance on the property. This will be charged at the same rate as someone who owns 100% of the equity on the property
- The ‘initial repair period’ means that landlords remain responsible for costs such as structural repairs and installations for 10 years after the property was built
- If a shared owner does not pay their rent, there are measures in place for landlords to regain full possession of the property.
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