In January 2015, the Department for Communities and Local Government (DCLG) and the Homes and Communities Agency (HCA) launched a consultation on proposals to streamline the resale of shared ownership properties to make it quicker and easier to sell them.

On 27 March 2015, DCLG issued its response to the consultation and set out the following policy changes which will come into effect in April:

1. The pre-emption right

Shared ownership leases funded through the Affordable Homes Programme include a pre-emption clause where the provider can nominate a subsequent purchaser and repurchase the property. This currently applies to both current and former shared ownership homes which have been 100% staircased. The housing provider has eight weeks to do so before the home is put on the open market. The right remains for 21 years after a householder has 100% staircased and applies equally to any subsequent owner.

The clause was introduced to retain shared ownership properties for those who might need them and are in genuine housing need. However, providers can waive the right if they chose and many respondents stated that the pre-emption right is rarely used. It has been argued that the clause raises barriers to selling shared ownership homes, particularly for successive 100% owners who buy some years on from final staircasing and who have never been shared owners.

Outcome from the consultation

The HCA will amend the model leases and guidance for future shared ownership properties to remove the pre-emption right following 100% staircasing. The HCA will also amend its guidance to recommend that providers remove the pre-emption right following 100% staircasing for existing shared ownership leases.

Changes to the pre-emption right would only affect properties where owners have staircased to 100% ownership. As rural protected areas prevent staircasing above 80%, the change would not have any impact in these areas.

2. The eight week nomination period

Providers currently have eight weeks to nominate new purchasers for an existing shared ownership home before it can be put on the open market.

Outcome from the consultation

The Government has decided not to apply the proposed changes to the nomination period for shared ownership. The existing eight week period prior to any property being put on the open market remains in place.

3. Other issues

The consultation also sought views on other proposals for how government might streamline the process for selling on shared ownership properties and encourage the market for second-hand shared ownership homes.

Outcome from the consultation

The Chancellor announced in the Budget on 18 March 2015 that the Government will undertake a review of shared ownership in the summer. The ‘Review’ will consider some of the issues raised in response to the consultation and further views will be invited.

The new model lease and guidance notes are in the initial draft stages and the HCA is hoping that these will be available in May.

To view the consultation in full please click on the link below

https://www.gov.uk/government/consultations/proposals-to-streamline-the-resale-of-shared-ownership-properties