Wednesday, October 21News For London

Government to ease the requirements of owning a property

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Picture Credit: Wikipedia

The government expects an expansion to the shared-ownership scheme, which will benefit 175,000 citizens from owning their own houses.

David Cameron said extra 175,000 aspiring homeowners will be created by an expansion to shared ownership. The government announced the shared ownership scheme will be re-invented to allow more people to part buy and part rent properties.

Anyone earning below £90,000 in London, and £80,000 in England will be allowed to own property, as the expansion to the house ownership will be enforced from April next year.

The government will lose the restrictions on the ownership. “Because it has been heavily restricted, many people have missed out”, David Cameron said. The new scheme is expected to cover a wider range of people from various professions and from different areas, “building a nation of homeowners”.

The cost effectiveness of owning a shared ownership

Owning a shared-ownership property is less expensive than renting or buying a house. According to the data of National Housing Federation, there is £100 cheaper in average monthly shared ownership – the cost of £688 – than renting one and £200 cheaper than outright ownership.

Around 55,000 applications handed in over a year for shared ownership, National Housing Federation said, “with over 275,000 properties already delivered.”

Before the expansion to shared-ownership, the scheme was seen as a less effective approach of boosting the housing market. Boris Worrall, Executive Director of Orbit, said the old version of the scheme “lacked scale”, because of insufficient supplies in a single, second hand market. Along with the old one, it only includes people in certain professions and from specific areas. Many low and middle families were singled out from the scheme. With the new development, Mr Boris said there might be some improvements.

What you need to know about a shared ownership

Shared ownership scheme is an approach of part-owning and part-renting a house. It is designed to fulfil people’s desire of having their own house despite them not being able to afford to buy a one outright.

The shared ownership give people an opportunity to buy a stake of between 25 per cent and 75 per cent of a property’s value, using a deposit and a mortgage.

Apart from the part you owned, shared owners only need to pay a rental based on the remaining share, which is owned by the local housing association.

According to the government’s data, more than 230,000 people have already benefited from the shared ownership scheme since 2010. Boosted by the expansion to the shared-ownership, David Cameron believes it will create 1 million more homeowners by 2020.