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Budget 2018: Chancellor seeks privately-funded shared ownership schemes for 650k homes

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  • 30/10/2018
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Budget 2018: Chancellor seeks privately-funded shared ownership schemes for 650k homes
The chancellor launched a consultation on privately-funded shared home ownership schemes, as well as extending a previous stamp duty exemption for first-time buyers to those purchasing shared home ownership properties.

 

The announcement is retrospective so any FTB who has bought a shared ownership property since the last budget on 22 November 2017 worth up to half a million pounds can claim the stamp duty back, bringing SHO purchases in line with the secondhand market, if they bought after the budget.

Previously, if buyers paid stamp duty on subsequent chunks in the time period they were not eligible, whereas now, every stage is treated as a separate purchase.

This builds on the stamp duty exemption for first-time buyers for properties worth up to £300,000 confirmed in last year’s budget.

He simultaneously launched a consultation on the strategic expansion of privately-funded shared home ownership schemes fueled by a further £500m targeting 650,000 homes.

 

Private funding preferred

The policy wording invites proposals for schemes which are ‘primarily privately-funded’ or do not require government investment. It is also interested in proposals for affordable schemes and will consider the removal of regulatory hurdles.

It states: “Proposals should not rely on government grant funding, government guarantees or developer s106 contributions and continues that it is really interested to hear how government loan funding will play an important part in removing the risk and financial uncertainty created by staircasing.’

The consultation said proposals should be targeted towards households earning under £80,000 in income or £90,000 in London to mitigate the risks of a challenge on state aid grounds.

The recent Green Paper, ‘A new deal for social housing’, confirmed the government is keen to address the issues around staircasing in the existing shared ownership offer, so allowing homeowners to staircase in smaller increments. It said proposals for funding which draw upon these ideas and improve upon the terms of the standard shared ownership lease will be particularly welcomed.

“The government will look particularly favourably upon proposals which provide households with a right to sell the property back to investors, enhanced staircasing flexibility, or a right to staircase at the original purchase price,” it said.

There is also real interest in fostering mortgage product innovation to support this market primarily for new build from investors impeded by regulatory obstacles.

The paper said: “We believe that models in this area may be particularly beneficial for households paying high rental payments which are sufficient to cover the costs of a mortgage, but are currently unable to access a sufficient mortgage to move into homeownership.”

Responses must be submitted before 1 February to privatesharedownership@communities.gov.uk

See more information here.

 

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