Funding for affordable homeownership increases as next £12bn Affordable Homes Programme details revealed

The government also confirmed that the vast majority of rented homes delivered through the new programme will be subject to Right to Shared Ownership, as revealed by Inside Housing in March this year.

The policy, which gives housing association tenants the right to buy a portion of their property, was announced by housing secretary Robert Jenrick at the Conservative Party conference in October last year.

Homes that are exempt from the shared ownership Right to Buy include council homes, supported housing, alms houses, and homes in designated protected areas and rural exception sites.

To qualify for the right, residents must have been a social tenant for at least three years and they must have lived in the property in question for at least 12 months.

Tenants will also be required to demonstrate that they can afford and maintain homeownership and must have an annual income of £80,000 or less (£90,000 in London).

It comes as the government also announces a new model for shared ownership, which reduces the minimum initial share you can buy in a property from 25% to 10%.

Under the new model, residents will be able to buy additional shares in their homes in 1% instalments, rather than the current 10%, and landlords will be required to cover the cost of repairs and maintenance for an initial 10-year period.

Mr Jenrick said: “Today’s announcement represents the highest single funding commitment to affordable housing in a decade and is part of our comprehensive plans to build back better.

“This government is helping hard-working families and prospective first-time buyers get their feet on the housing ladder in an affordable way.

“Thanks to the range of flexible ownership options being made available, more families across the country will be able to realise their dreams of owning their own home, with half of these homes being made available for ownership.”

Nick Walkley, chief executive of Homes England, said: “We welcome the launch of the new affordable homes fund, which gives Homes England a unique opportunity to work on behalf of the government to accelerate the delivery of high-quality, affordable homes.

“The fund will support improved productivity in construction and unlock new economic opportunities across the country. Despite the challenges of COVID-19, this long-term funding settlement gives our partners the confidence they need to invest in new homes and the communities they work for.”

Kate Henderson, chief executive of the National Housing Federation, said she welcome that the government has announced a funding programme that includes money for social rent.

She said: “Putting social and affordable rent on an equal footing with affordable homeownership is particularly positive; meaning we can build homes for those on the lowest incomes such as key workers. It is also great to see funding for supported housing - such as homeless and domestic abuse shelters and older people housing - as this has been invaluable in keeping people safe during the pandemic.

However, she added: “We welcome a focus on shared ownership to help people onto the housing ladder; however there are some questions and risks in the new proposed model, that may make it harder for housing associations to build in the current climate.

"What we need from government to shore up investment is certainty and confidence, and some of the proposals for shared ownership and the introduction of the Right to Shared Ownership may have the opposite effect.”

David Renard, Local Government Association housing spokesperson, said: “It is good the Government has acted on our call to bring forward the Affordable Homes Programme. It is also positive that the Government is consulting on how homes can be made more accessible for older and disabled people.

“With more than one million households on council housing waiting lists, it is vital that we build more housing for social rent, and we look forward to seeing more clarity around how this will be delivered.

“This is why we are calling for councils to be given the powers and tools to deliver a programme of 100,000 social homes a year, which would not only meet a third of the government’s housing target, but reduce homelessness, get rough sleepers off the streets and support people’s wellbeing.

"This includes reforming Right to Buy and allowing councils to keep receipts in full and set discounts locally.

“In addition, we would like to see the programme go further and allow councils to combine Right to Buy receipts with funding from the programme to deliver more housing.”

David Montague, L&Q chief executive, said: "This commitment, and the longer-term funding, gives L&Q further confidence to make the investment decisions that will deliver 100,000 new homes over the coming years.

"We will need to see the detail of today’s an​nouncement to understand how some aspects will work in practice, but we will work closely with the government and other partners to deliver a significant and viable programme of quality new homes."