Shared ownership income caps rise for the first time in a decade, widening access for households earning up to £110,000 in London
The government has raised shared ownership income eligibility caps for the first time in a decade. Industry figures who have long argued the frozen thresholds were shutting out working households welcomed the move.
Housing and Planning minister Matthew Pennycook confirmed the changes in a written ministerial statement, with the new caps taking effect in the new year. Outside London, the threshold rises from £80,000 to £90,000. In the capital, it increases from £90,000 to £110,000. For brokers, the changes open a new client pipeline — any household previously ruled out on income grounds may now be eligible.
Rob Barnard, intermediary relationship director at Pepper Money, said the decision was overdue.
“This is a welcome and sensible decision,” he said. “The shared ownership income caps had been frozen since 2016, while house prices rose by 37% and earnings by 42%. That left a growing number of working households earning too much to qualify, yet still unable to buy a suitable home on the open market.”
Stay ahead of the UK mortgage market. Subscribe to the Mortgage Introducer daily newsletter for broker news, rate updates, and the industry latest delivered to your inbox every morning.
What Pepper Money’s research revealed about shared ownership
Earlier this month, Pepper Money returned to Downing Street with its white paper, Sustaining the Development of Shared Ownership.
“Our research found that one in ten non-homeowners earning above the caps had already tried to use shared ownership and been told they were ineligible,” Barnard said. “Two thirds said they would consider it if the caps were raised to include them. Raising the caps opens the door to many of those households, but it needs to be reviewed regularly. This is an important step, but there is more to do.”
Barnard added that the government must commit to reviewing the thresholds regularly.
What do the new shared ownership income caps mean for brokers?
Any client household earning between £80,000 and £90,000 outside London who was previously ruled out may now qualify. The same applies for London households earning between £90,000 and £110,000. Higher shared ownership income caps mean more prospects for brokers — worth revisiting any client previously turned away on income grounds.
The ministerial statement also confirmed several other measures from the first phase. Registered providers receiving Social and Affordable Homes Programme (SAHP) grant funding must give greater consideration to long-term customer affordability and increase transparency on costs. Fees must not be used as a source of profit or to cross-subsidise other areas of work.
Pennycook confirmed the government will not alter the CPI+1% annual rent increase in the model lease before 2036.
Service charges and what comes next
High and rising service charges remain a persistent challenge for shared owners. The government acknowledged the problem hits harder for those on lower-to-middle incomes holding only a partial equity stake.
Phase two will examine staircasing costs — the fees and barriers that make buying additional portions of a shared ownership home expensive. The government plans to assess nomination periods and resale fees, and improve guidance for existing owners. It will also review the buyback process for those unable to sell or remain in their home.
Barnard offered a note of caution for clients holding out hope that Your First Home will deliver further accessibility changes. “Eligibility rules need to reflect what people actually earn and what homes actually cost today.”
The new outside-London cap will be reflected in the Homes England Capital Funding Guide. For existing and newly eligible shared ownership clients, the raised income caps represent the most significant eligibility shift since 2016.
