New shared ownership model lease – what registered providers can expect01/04/21
The Government has announced further guidance on the much anticipated new model of shared ownership lease, as reported by Inside Housing on 1 April 2021. Although the lease is not yet published, it is anticipated to include the following:
- Term: All homes built under the new model will be issued with a minimum 990-year lease term. The Government is exploring the options for current shared owners to be given a right to extend their lease by 990 years.
- Repairs: A new requirement for landlords to be responsible for repairs in the first ten years of the shared ownership lease. Shared owners will be able to claim from their registered provider landlord a maximum of £500 per year to cover repairs. Unspent expenditure can be rolled over for one year.
- Initial stake: The initial minimum stake shared owners can purchase in their property will be reduced to 10%, compared with the current 25%.
- Staircasing: There are also plans to allow shared owners to staircase at increments of 1%, compared with the current minimum of 10%.
The new shared ownership model will apply to all homes that receive grant funding via the Affordable Homes Programme 2021-26. It will also apply to shared ownership homes funded via Section 106 contributions but there will be a transition period for this so that current schemes are not adversely affected.
How Capsticks can help
Our Housing and Regeneration lawyers are experts in shared ownership, acting for over 200 housing associations we provide advice on everything from setting up shared ownership schemes and new build plot sales to shared equity and financing. If you have any questions in relation to the current or the new proposed model lease, please contact either Nalton Stembari or James Howard.