On 22 June 2022 the office of national statistics announced that May’s 12-months CPI was 9.1% and the RPI was 11.7%. the sectors rent formula for general needs and sheltered housing is based on September’s CPI plus 1%. So we have time to consider the impact of a high CPI in September and either apply a self-imposed or externally imposed rent cap.
However the immediate problem is selling shared ownership properties based upon an annual rent increase of RPI + 0.5%, especially the time when the base rate is also increasing.
Are members already encountering problems with the shared ownership market following the recent increases in inflation and the base rate – and what are actions are you having to take to promote the sale of shared ownership properties?
Author: Ian Parker
I am looking into purchasing a property with home reach, but an RPI of 9.8% means I would jump from paying just over £300 per month to over £1000 per month. This would be unaffordable, Am I right with my Thinking?
Hi Stuart
I cannot give you a definitive answer without knowing all the facts but I have copied below a link to a shared ownership calculator that will generate your year 1 rent and that will rise annually by RPI + 0.5% – if you staircase the rent will reduce.
https://www.newlonliving.co.uk/buying-information/mortgage-calculator/
Help this helps
Ian
So that calculator is using a 2.75 interest rate, far from the current rate on shared ownership rent, the rpi increase has made shared ownership (affordable housing ha) very expensive and unaffordable for all but a few