A new Right to Shared Ownership scheme has been launched to help tenants in social housing buy a share of their home.
The initiative enables people already living in social and affordable housing to buy a stake of between 10% and 75% in their property for the first time.
They can then increase their share until they own the property outright.
The move is part of the government’s drive to help more people own their own home.
Minister for Housing Lucy Frazer said: “All hard-working families and young people deserve the chance to live in a home of their own.
“We are helping tenants to do just that by supporting them with small, manageable steps onto the housing ladder, through the Right to Shared Ownership.”
How does Right to Shared Ownership work?
Under the scheme, you can purchase a share of between 10% and 75% of your home, with either cash or a mortgage.
You can then increase this stake, known as staircasing, until you own the property outright.
Standard staircasing enables you to purchase additional 5% stakes in your home. You can do this at any time and there is no limit to how many transactions you do.
Alternatively, you can do gradual staircasing, under which you increase your equity stake by 1% every year.
You continue to pay rent on the portion of your home that you do not own, with rent during the first year capped at 3% of the amount you don’t own.
After the first year, rent increases by the rate of inflation, as measured by the Retail Prices Index, plus 0.5%.
What is Shared Ownership? Everything you need to know
Who can use the scheme?
The scheme is open to people in England who have lived in a Social Rent or Affordable Rent property for at least three years.
To be eligible, your current home must have been built under the government’s Affordable Homes Programme 2021-26, and you must have lived in it for 12 months.
You must also be up to date with your rent, and have a total household income of £80,000 a year or less, rising to £90,000 a year in London.
In addition, you cannot already own a property and you must be unable to buy a suitable home on the open market.
If you think your home qualifies and you would like to use the scheme, you can find the application form here.
What else do I need to know?
When renting a Social or Affordable Rent home, you may have paid for utilities, such as gas and electricity, as part of your rent.
Once you have used the Right to Shared Ownership scheme to buy a share in your home, you will be responsible for paying these bills yourself.
You will also have to pay an annual service charge.
Depending on how old the property is, your landlord may help you with the cost of repairs and maintenance.
Repairs are covered by the landlord for the first 10 years after the property was built, known as the Initial Repair Period.
What’s the background?
Shared Ownership is already available on certain properties, but if you want to use the scheme, you have to buy a stake in a Shared Ownership home that is on the market.
The latest scheme extends the right to buy a share of a property to people who are already renting homes built under the Affordable Homes Programme 2021-26.
It is part of the government’s £11.5 billion investment to build more affordable properties.
The wider Shared Ownership Programme has already enabled thousands of people to get on to the property ladder, with an estimated 136,000 new Shared Ownership homes built since 2010.