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Shared ownership Right to Buy still planned by government despite manifesto omission
Controversial plans to introduce a shared ownership Right to Buy for housing association tenants are still on the table, despite the scheme being omitted from the Conservative Party’s manifesto before the general election.
A source close to the government has told Inside Housing that further details of the reformed shared ownership model, including the new ‘right to shared ownership’, would be announced in due course.
The government had initially announced plans to introduce a new law to allow some social housing tenants to purchase a stake in their home in October last year.
But while the Conservative Party promised to extend the Right to Buy for housing association tenants to further regions of the country in its election manifesto, published in November, it failed to mention any shared ownership plans.
The shared ownership Right to Buy would automatically give housing association tenants living in new builds the right to buy a share of as little as 10% of their home, which could then be built up in 1% chunks.
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The government would also work with associations to open this up on a voluntary basis to existing properties, it has said.
Tenants would be able to raise money to buy a percentage of the home, and then pay rent on the remaining share, as well as paying the full service charge covering repairs and maintenance.
But the housing association sector has raised questions about the plans, particularly around the loans that associations are able to obtain if their social housing stock was converted to shared ownership stock. The National Housing Federation said the plan could “worsen the housing crisis”.
There have also been questions around whether an automatic right for new build properties is enforceable without housing associations becoming public bodies again.
In November it emerged that housing associations were being forced to reconsider their bids for the next phase of strategic partnership funding from Homes England because of uncertainty about what impact the shared ownership Right to Buy would have.
It is understood that the funding handed out through the next phase of the programme will come with the condition that the new homes will be subject to the shared ownership Right to Buy.
The shared ownership Right to Buy plan is part of a major overhaul of the shared ownership model which began last year. Changes being proposed include allowing shared owners to staircase in smaller chunks, while the government is also seeking views on removing the pre-emption clause in shared ownership leases, which gives landlords the exclusive rights to market a property for the first eight weeks when a shared owner wishes to sell.
Shared ownership Right to Buy: what we know so far
Currently a housing association tenant renting a £200,000 property cannot buy a share of that property.
Under Right To Shared Ownership, the tenant could buy an initial 10% stake worth £20,000, while paying subsidised rent on the remaining 90% of the property.
The tenant could make up this 10% stake through a £2,000 deposit and a £18,000 mortgage.
Click here to read our in-depth piece about shared ownership Right to Buy
