The Government will raise household income caps for shared ownership in the new year, the first increase since the limits were frozen in 2016. Housing Minister Matthew Pennycook announced the change in a statement to Parliament on 26 October, as part of work to improve the fairness and transparency of the model.

Under the new limits, the cap will rise from £80,000 to £90,000 outside London, and from £90,000 to £110,000 in London. The changes will be reflected in Homes England's capital funding guidance and in the next annual monitoring report for the London Plan.

Why the caps are changing

Mr Pennycook said the new caps recognise the impact of inflation and earnings growth since 2016. He said the Government remains committed to shared ownership, which lets buyers purchase a share of a home and pay rent on the rest, but added that it was fully aware shared owners continue to struggle with affordability, transparency, management, staircasing and resale challenges.

The sector had pressed for a larger rise. In February, Clarion, the UK's largest social landlord, urged the Government to raise thresholds to £120,000 in London and £110,000 outside London, arguing that the frozen caps were pricing out the key workers the scheme was designed for.

What it means for buyers

Mortgage Solutions reports that Mr Pennycook said shared ownership had enabled many people to get on the property ladder who would not otherwise have been able to do so, and that the Government wanted to keep it accessible to lower-to-middle income borrowers.

Service charges remain a concern. Mr Pennycook noted that charges were rising for leaseholders regardless of management or freehold arrangements, and that sharp increases often create acute financial pressure for shared owners despite them owning only a partial stake. This is a shared ownership announcement only, and is separate from the reported income caps for the new Your First Home scheme, which are due to be set out in the Budget.

Sources: Inside Housing and Mortgage Solutions.