Shared ownership schemes are drastically failing to deliver an
affordable route to homeownership for too many people and subject
buyers to rising rents, uncapped service charges, and a
disproportionate exposure to repair and maintenance costs, says
the cross-party Levelling Up, Housing and Communities
(LUHC) Committee in a report published today (Thursday).
The Shared ownership report finds that rents,
service charges, and the complexity of homeownership leases make
shared ownership an unbearable reality for many people seeking to
take the step to become full, 100% homeowners.
The report calls for the Government to take urgent and
significant action to reform how shared ownership schemes
currently operate so they can deliver an affordable route to
homeownership.
The shared ownership model enables people to buy a share in a
property, usually from a Housing Association, and pay subsidised
rent on the rest. Sometimes known as ‘part buy, part rent’,
shared ownership requires a smaller deposit and mortgage, making
it, in theory, a more affordable route into homeownership than
buying on the open market.
, Chair of the Levelling
Up, Housing and
Communities (LUHC) Committee, said: “Shared
ownership was hailed as an answer to the housing crisis
especially for first-time buyers. However, we have found that for
too many people shared ownership becomes an unbearable reality,
where a blizzard of charges and an unfair burden for maintenance
and repair costs means that they are unable to afford full
homeownership.
“Rising rents, hefty service charges, complex leases,
disproportionate repairs and maintenance costs are experienced by
too many people who take the shared ownership route. The
Government needs to take clear and urgent action to tackle these
issues and ensure shared ownership genuinely delivers affordable
homeownership”.
The report highlights the complexity of shared ownership leases
and identifies a lack of a single, specialist source of
independent and impartial advice for shared owners. The report
calls on the Government and Homes England to improve the
accessibility and quality of guidance and ensure providers offer
the specialist advice needed to understand complex shared
ownership leases.
The report acknowledges there is broad support for the
improvements made to shared ownership leases in 2021 to address
issues around costs and service but notes that
these provisions do not extend to shared owners who own
properties delivered under the previous Affordable Homes
Programme (2016-2023). The report highlights the risk that this
will result in the emergence of a two-tier market, where older,
less attractive shared ownership properties become more difficult
or even impossible to sell. The report recommends the Government
explore how it can extend the improvements made to shared
ownership leases from 2021 onwards to properties delivered under
the 2016-2023 Affordable Homes Programme.
The report also recommends that the Government examine how it can
ensure shared owners are only ever liable for repairs and
maintenance costs proportionate to the size of share they own and
ensure the Regulator for Social Housing updates its Tenant
Satisfaction Measures to include satisfaction with repairs and
maintenance for shared owners.
ENDS
Further information
The report summary is on p.3. A list of the report’s conclusions
and recommendations can be found on p.38. A list of the public
evidence sessions for this inquiry (and links to the transcripts
in each case) can be found on p.44 of the report.
