Sheffield is one of 14 trailblazer authorities set to receive a £5m share of Government funding as part of the roll out of new Family Hubs.
New Shared Ownership Scheme plans to help first-time buyers
A new Shared Ownership scheme, designed to help people buy part shares in a home they want to purchase, will be proposed at our Cabinet meeting on 17th March.
If approved, we will become a provider and manager of Shared Ownership homes which are built or acquired as part of the council’s approved Stock Increase Programme.
It will mean that eligible buyers will be able to buy a share of a house or flat from us and pay subsidised rent on the remaining share which is retained by the council.
We assess the need for affordable housing every 5 years and in the last Strategic Housing Market Assessment (SHMA) in 2019 it was found that Sheffield had an affordable housing shortfall of 902 homes each year for the next 5 years. In the same year an update on the progress for increasing the delivery of 3100 new homes in the city included recommendations that proposals for Shared Ownership homes be developed as part of this to improve housing choice in some areas.
Councillor Paul Wood, Cabinet Member for Neighbourhoods and Community Safety said: “This is such good news for young families, couples or single people who can afford to buy part of a new home through either a deposit or a mortgage but who can’t get a mortgage for the full value of the property.
“They will need to raise a sufficient deposit, usually between 5% and 10% and secure a mortgage to buy a share of the property. They will pay rent on the part of the property that is owned by the council. At first they will be able to buy between 10% and 75% of the home based on their ability to afford the purchase. They can keep buying shares until they own the property outright, known as ‘staircasing’. They will be able to buy a further 1% stake each year for the first 15 years or choose to buy a larger stake from 5% upwards at any time.”
The Shared Ownership model would provide a 10-year period on new build homes during which the costs of some repairs would be met by the council. Only after 10 years would the shared owner take on full responsibility for repairs costs. This 10 year period is in addition to any repairs or maintenance covered by the builders warranty and so it would cover any works required that the building warranty does not cover.
Councillor Wood added: “Shared Ownership not only provides a way for households to contribute towards meeting their housing needs it also helps relieve housing register pressures and reduce competition for social rented homes. We estimate that there are over 5,200 households registered for a council or housing association rented home in Sheffield who have the financial ability to purchases a 25% stake in a 3-bedroom shared ownership property. This scheme will really help those people if they want to start paying towards the purchase of a property. Social housing is a tenure of choice for many households, but at the moment households are registered for housing on average 8 years before being granted a tenancy.
“In a nutshell this scheme will help households purchase a particular type of home, or a home in a particular area that they cannot afford to buy in full. It will also allow households on limited incomes to purchase a larger or specialist type of house to meet their needs.”
The criteria for who’s eligible for the Shared Ownership scheme is first-time buyers or those who used to own a home but can’t afford one now, and that households will move into the home and use it as their primary residence.
Those interested in finding out more about whether the scheme will suit them will need to find out how much they can borrow using an affordability calculator on the help to buy north agent website, find out if they can get a mortgage, undergo affordability checks by the mortgage lender and provide a deposit on the share that they will be purchasing.
The full report and policy on the Shared Ownership Scheme is at www.democracy.sheffield.gov.uk – Cabinet papers for 17th March.
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