Gove outlines changes to rules on shared ownership grant funding

Michael Gove has announced changes to Homes England’s capital funding guide for shared ownership, allowing registered providers to recycle capital grant funding to ‘buy back’ shared ownership homes where a property sale is difficult due to building safety issues.

The changes will also permit providers to relax restrictions on the levels of rent that can be charged when a shared owner sublets their property.

In his letter addressed to registered social housing providers on 19 December, Gove said that he does not believe that it is right for registered providers to adopt a “blanket approach” to subletting.

Gove said he would instead encourage housing providers to “tailor the terms of your subletting offer to the individual needs of your shared owners”.

See also >> Shared ownership still considered too ‘niche’ and ‘unpredictable’, MPs hear

See also >> Increased costs of new shared ownership model could hit viability, housing associations warn

Gove stated that the option to ‘buy back’ shared ownership homes where sales “are proving especially problematic due to building safety issues” is available for homes delivered through the Affordable Homes Programme and through section 106 developer contributions.

He added that in the case of back-to-back staircasing transactions, where there is a building safety concern leading to the final sales price being below the initial market valuation, the housing provider should work with the shared owner to update the valuation.

Gove said: “Where it appears that the sales price of the home will need to be reduced based on the actual offers received, the shared owner should be supported to secure a new valuation as quickly and cost efficiently as possible”.

He stated that this could include commissioning a desktop reassessment or using the incoming buyer’s valuation where it is RICS compliant.

Gove warned that housing providers must make the details of all relevant policies available on their websites, in a clear and accessible manner. He stated that the department has heard regular feedback from shared owners that they are unsure of their options and that consistent advice is not always provided.