The Homeownership Funding Association (HFA) has called on chancellor Jeremy Hunt to amend the definition of ‘financial institution’ in the 2003 Finance Act to help ease the UK’s homeownership crisis.

The HFA believes such as change through secondary legislation would realign Gradual Homeownership and Rent to Own models with regular first-time buyer purchases, allowing people using the options to access stamp duty relief as well as bypassing the currently required 3% government surcharge.

First-time buyers using the schemes would also be eligible to use Lifetime ISAs towards a deposit, HFA said.

At present, part-rent and part-buy purchases are treated as ‘multiple purchases’, and so are treated differently to ordinary first-time purchases, the organisation explained. It estimates the suggested amendment would increase future UK home ownership by 9% annually, and believes its omission from the recent budget was a missed opportunity.

Nigel Purves, chairman of the Homeownership Funding Association, commented: “As home purchase has become more and more difficult in recent years the private sector has responded with innovation that now assists would-be buyers onto the property ladder and without recourse to the taxpayer.

“However, the growing gap in UK homeownership that our members’ efforts are solving are hampered by stamp duty legislation that has not yet caught up with our solution. It would seem churlish for the chancellor to ignore our plea for change in respect of genuine first-time buyers being helped to buy and in numbers that would represent a significant uplift in UK homeownership.

“We therefore call on Jeremy Hunt MP to enter a direct dialogue with us so that we may encourage him to act in what is undoubtedly a win for him as it is for potential young homeowners and their families too.”