NEW MODEL SHARED OWNERSHIP – GOVERNMENT RESPONSE TO TECHNICAL CONSULTATION – HEADLINES
On 1 April, the Government published its response to the technical consultation on New Model Shared Ownership. There is much for RPs and local planning authorities to take on board and prepare for ahead of the introduction of the new model. Here are some headline points of interest from the Government’s response:
- Initial lease term of 990 years (and legislation to follow to allow existing shared owners to request 990 year lease extension).
- New key information document (detail to follow from Homes England) to be provided to prospective buyers at an early stage of sales process.
- Homes England is reviewing affordability guidance – applicants may be allowed to use unsecured lending to access shared ownership.
- HMLR Local Authority level HPI data is confirmed as the relevant index for 1% staircasing, but either RP or owner may pay for own RICS valuation if they don’t like the HPI valuation.
- 1% staircasing is permitted once a year for 15 years (no rollover), but resale triggers a new 15 year period.
- Onus is on RPs to set up efficient systems and automated processes to manage costs of 1% staircasing (which cannot be passed to shared owners).
- The £500 per annum cap on claims by shared owners for internal repairs costs has been confirmed and internal repairs are limited to faulty installations not already covered by a warranty or guarantee. £500 allowance can be rolled over for one year. RPs will be expected to have a policy on repairs and there will be strict timetables for compliance by RPs, which may be challenging e.g. approve/reject claims within seven days and reimburse costs within 21 days.
- There will be transitional provisions for adoption of new model shared ownership on S106 schemes.
- New model lease to be published in May.
- Government recognition that there are not enough experienced shared ownership legal practitioners.
Spire Solicitors LLP is a leading provider of legal advice to the affordable housing sector. To find out how Spire can help your organisation, contact us on 01603 677077 and ask to speak to a member of the Social Housing Team.
This is not legal advice; it is intended to provide information of general interest about current legal issues.