House key

More affordable homes are on the way

It might be near impossible to get onto the housing ladder if you’re a first time buyer or on low income right now, but things are looking up. At least they will be from 2021.

The government has unveiled details of the new £11.5 billion Affordable Homes Programme.

In a statement, the government said between 2021 and 2026, up to 180,000 new homes will be built, adding that “around half of the new homes will be available for affordable home ownership” and “the rest will be made available for discounted rent, including 10% for supported housing”.

Details of how this will work exactly are yet to be revealed, but most of the funding will go towards homes outside of London.

There’s a big caveat though – “should economic conditions allow”, the government said.

They simultaneously announced changes to the shared ownership scheme.

At the moment, those looking to buy shared ownership homes have to buy at least 25% of the property as part of their initial purchase. Depending on the home, this can actually be a lot, especially when you factor in the premium that’s often applied to new build homes.

But as part of the Affordable Homes Programme, prospective buyers will soon be able to purchase just 10% of their home to start with, meaning you don’t need nearly as much money to get on the property ladder.

You still have to pay rent on the rest of the property, so it’s obviously in your interest to buy as much of the property as possible in one go.

When you staircase your property, you can buy additional shares at increments of just 1%, rather than the usual 5 or 10%. The government says there will be heavily reduced fees for doing so, but it hasn’t made explicit how this would work.

It’s always worth staircasing as few times as possible because of these fees. At the moment, when you staircase your property, you have to pay for an evaluation by a surveyor and a conveyancing solicitor to handle the paperwork. And depending on whether you have a mortgage, there may be additional fees too.

Finally, for the first 10 years of a new shared ownership, the landlord also has to share the repair and maintenance costs for the first time – something that’s currently solely borne by the homeowner.

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