The Housing Corporation is to launch a scheme that will protect shared homeowners who are unable to maintain their mortgage repayments.
Under the scheme, council and RSL tenants would be given the chance to buy at least a 10% share in their homes – safe in the knowledge that their landlord is obliged to buy back the property if they default on their mortgage. Although the tenants would lose their share in the property, they would be allowed to remain there at an affordable rent.

The scheme is being worked on by consultant Hacas Chapman Hendy and seven registered social landlords with the backing of the corporation, the ODPM and the Council of Mortgage Lenders. It will be unveiled in the next two months.

Hacas director Derek Joseph said: "This is a system to take the risk out for people who want to buy but aren't sure they can commit to shared ownership. There's nothing in the market now that gives you the ability to stay in your own home and scale downwards. If you want to scale down on shared ownership, basically you've got to sell up and move out."

The system would be used primarily for homes provided by developers in return for planning permission through section 106 agreements.

Source

Housing Today