Pennycook announces raising of shared ownership income eligibility caps

Matthew Pennycook has said the government will raise shared ownership income eligibility caps, in a pre-Budget announcement that has been immediately welcomed by housing association leaders in London.

The housing minister in a statement to parliament today announced the caps will be raised in the new year. They will be lifted from £80,000 to £90,000 outside of London and from £90,000 to £110,000 in the capital.

Household income eligibility caps for shared ownership hadnot been changed since 2016, despite inflation. Many sector leaders argue this has led to fewer people on lower-to-middle incomes being able to access the product as a result.

The G15 and Housing Today, in the State of the Capital 2026 report in May, jointly called for the caps to be changed to reflect London’s housing market.

Welcoming today’s announcement, Ian McDermott, chief executive of Peabody and chair of the G15, said: “It’s a change we’ve long called for and will open home ownership up to more middle-income households, including key workers who are increasingly priced out of the capital.

“It should also help stimulate demand, improve the viability of developments and support the delivery of more affordable homes across the country. “

Clare Miller, chief executive of Clarion, said: “This is a change working households have been waiting for. Young people, particularly in London, have spent years saving hard and doing everything right, only to watch their dream of owning a home slip further away like a finish line that keeps moving.

“With the London cap rising from £90,000 to £110,000, two key workers earning up to £55,000 each will now be able to buy through shared ownership, and the increase from £80,000 to £90,000 elsewhere extends that opportunity across the country, all at no cost to the taxpayer.”

Pennycook said the government is in what he termed ‘phase two’ of its shared ownership improvement programme. He said government will consider measures to reduce existing barriers to staircasing, explore options to support resales, develop better information and guidance for existing shared owners and review the function of leasehold repurchases as an exit route for shared owners who find themselves unable either to afford to remain in their home or to sell it.

Pennycook said the government has already made it clear through the Social and Affordable Homes Programme (SAHP) providers need to give “greater consideration to long-term customer affordability, increasing transparency and fairness on costs, and giving customers the ability to opt out of fees for services that are optional.” He said the government has specified in guidance that fees for shared owners should not be used to cross-subsidise other activities.

The change to shared ownership caps is one of several housing measures trailed ahead of Wednesday’s Budget over the past few days.

The government announced it will update the ‘green book’ – the framework used to access business cases for spending projects.

A spokesperson said: “Projects on different issues, for example a housing scheme or transport proposal, are considered independently of each other. ”This means that the wider potential available from projects in a certain area is often missed or undervalued, whereas considering projects together gives a fuller picture of their potential,” he added.

The guidance will be updated to “help places build investment plans around a more detailed picture of their local economy”. The government also announced a further £432m towards tackling rough sleeping.

Ian McDermott said: “Taken together, these measures recognise the central role housing plays in creating successful places and a stronger economy.

“We look forward to working with government, the Mayor of London and councils and our partners to turn this progress into more homes and opportunities for people up and down the country.”

More detail is also expected on Wednesday of the Your First Home equity loan scheme which aims to stimulate housing demand. The policy is expected to support 2.5% deposits, backed by 20% government-backed equity loans for prospective buyers purchasing a new build property from a developer signed up to the scheme. People will be able to access the loans with an initial interest- free period. The scheme will also set a household income cap, with local property price caps, to ensure it is targeted at those on lower incomes.

The government is also reportedly set to announce an extra £1bn for the Social and Affordable Homes Programme, bringing its total grant funding to £40bn. According to the BBC, the Budget will confirm greater powers and funding for mayors and regional leaders across England.

The government will reportedly work with mayors from 2028 to design a new £1.5bn facility for councils and regional bodies to borrow at preferential rates.