Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Vistry Proposes New Shared Ownership Model to Add 30,000 Homes Annually

A new choice-led shared ownership model could contribute 30,000 homes a year towards the UK government's target of 1.5 million homes, according to homebuilder Vistry. The proposal is outlined in a white paper published by Vistry, which is currently being developed with input from the National Housing Bank and policymakers.

The choice-led shared ownership scheme would allow eligible first-time buyers to purchase a qualifying new-build home with a minimum 60% share using a traditional mortgage. The remaining 40% would be supported by institutional funding, including a lender-provided debt tranche and a proposed 1% equity contribution from the National Housing Bank. Buyers would pay 3.5% rent on the unsold share, with rent increases based on a defined formula. As with existing shared ownership models, buyers would have the option to staircase to full ownership.

Vistry states that this model is designed to improve consumer choice and provide an option for buyers who are more capable of purchasing than standard shared owners but face challenges with deposit requirements and affordability. The company also claims that the scheme would require a smaller deposit and could bring buyers closer to full ownership more quickly.

The white paper suggests that the new model could generate investment opportunities, as homebuilders could commit to delivering additional homes through the scheme. Vistry reports that investors engaged for the white paper have already shown interest in committing more than £13.5 billion over five years. The company believes that clear terms and guarantees could attract private investment, and that funding from the National Housing Bank may not be needed once the scheme is established and scales up.

Vistry is calling for support from the National Housing Bank to roll out the product nationally. The white paper also recommends the creation of a Choice-led Shared Ownership Taskforce, which would bring together UK homebuilders with support from the Ministry of Housing, Communities and Local Government. The taskforce would be responsible for developing an operational model, building a pipeline of opportunities for investors, and engaging with consumers.

This proposal is relevant to UK letting agents and inventory clerks as it could increase the supply of new-build homes and expand the range of affordable housing options available to first-time buyers.