Following changes to the shared ownership model, the SORP Working Party are consulting on guidance to support those who prepare financial statements, as well as guidance on the new Right to Share Ownership model.
In 2020, the government consulted on a new model for shared ownership, with the changes to the model coming into effect from April 2021.
The new model for shared ownership introduced the following changes:
In the Social Housing White Paper 2021, the government then introduced the Right to Shared Ownership, giving social housing residents living in new rented homes the opportunity to purchase a stake in their home and then purchase further shares when they can afford to do so. Right to Shared Ownership also allows eligible tenants who occupy eligible properties to purchase their social or affordable rented property on shared ownership terms.
On behalf of the SORP-making body, the Housing SORP Working Party (SWP) discussed what the changes to the shared ownership model and the introduction of Right to Shared Ownership could mean for accounting and financial reporting.
The SWP agreed that changes to the minimum initial share, staircasing, and giving shared owners more control when they come to sell their own home do not change the fundamental nature of shared ownership and therefore do not change the guidance set out in the Housing SORP.
However, the key impact to financial reporting was considered to be the introduction of a 10-year period where shared owners will receive support from their landlord to pay for essential repairs.
In response to this, the SORP making-body has developed guidance to support those who prepare financial statements in relation to the new shared ownership model, alongside guidance on the Right to Shared Ownership.
The SWP are asking for feedback on the following in relation to the guidance:
The consultation closed on 13 April 2023. The final guidance will be published following a review of the feedback received during the consultation period. Read the responses to the consultation.