G15 responds to Call for Evidence on Shared Ownership
Earlier this year, the Levelling Up, Housing and Communities Committee had a call for evidence for an inquiry on Shared Ownership. Details can be found here.
As London’s leading housing associations, members of the G15 are collectively responsible for 38% of all Low-Cost Homeownership properties in England, the vast majority of which are Shared Ownership homes. We therefore thought it was important to use our expertise as landlords to help inform the committee.
Shared ownership makes it possible for people to own a home – even when they feel priced out of the property market. It is a useful affordable home ownership scheme designed as a stepping-stone to outright ownership, for those who cannot afford to buy a home on the open market.
We strongly believe that the product still works, especially in London, where affordability issues have meant that more and more people are being priced out of the market, making homeownership an unattainable dream.
Analysis shows that shared ownership not only significantly lowers the deposit people need upfront, but also incomes – especially when interest rates are higher than they are currently.
The flexibility of the product also lends itself to be adaptable, with staircasing and reverse staircasing as viable options for when people’s circumstances change. Also, with higher interest rates, people can have a higher rental portion which means lower mortgages (rents are generally charged at around 2.75% a year – far less than current interest rates).
It is important for housing associations to also act responsibly and provide clarity and simplicity in explanations to prospective buyers, as some other types of housing (like Rent to Buy products, LLR) may be better suited for their needs.
We also noted in our response that income caps should be revised upwards to ensure that those who were able to access the Help to Buy scheme can now access Shared Ownership as an alternative. This is particularly important in London, to ensure families can afford suitably large, family housing in their local communities.
Finally, we again made the case that grant funding is critical for our sector’s continual growth, and with the government currently not funding Help to Buy, levels of grant funding for Shared Ownership could be looked at instead.
However, this should not come to the detriment of delivering more social housing. With 1 in 23 children in temporary accommodation, the focus for both the government and all G15 members has to be on sub-market rent levels and critically social rent.
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