Shared ownership

The shared ownership scheme frequently fails to deliver on its promises, a new report has revealed.

According to Shared Ownership Resources, a project championing the interests of shared owners and homebuyers considering shared ownership, there is growing dissatisfaction with the scheme, with consumers citing conflicts of interest, mis-selling and poor value for money.

The report – Shared Ownership: The Consumer Perspective – reveals that:

• There is no evidence that shared ownership succeeds as a pathway to full home ownership for the majority of shared ownership households
• Conflicts of interest arising from the cross-subsidy housing model make ‘win-win’ scenarios less likely
• The government’s initial eligibility and affordability assessment calculator ignores inevitable future increases in total housing costs.
• The Advertising Standards Authority (ASA) has previously upheld two complaints about shared ownership advertising campaigns. The watchdog is currently investigating a complaint about a ‘Black Friday’ shared ownership promotion.

Paula Higgins, CEO of the HomeOwners Alliance, said: “It’s about time that we take a more forensic look at the shared ownership tenure to understand how successful it is to help first time buyers start their journey into being a homeowner.

“Does it give a helping hand or does it trap people in some sort of limbo between renting and owning that ultimately costs them more and they cannot escape from? The shortcomings of shared ownership identified in the report should not be used as an excuse to kill shared ownership as we are in the middle of an affordable housing crisis. The challenge is to get it right.”

The report makes a total of 18 recommendations to improve outcomes for shared owners, including:

• Tackle mis-selling and deliver an enforceable code of practice for shared ownership marketing and promotion
• Reform initial affordability assessments to take on board future total housing costs
• Strengthen regulatory oversight of ongoing affordability
• Improve data collection, evaluation and reporting on outcomes to drive meaningful reform
• Provide earlier and greater support for households where shared ownership is becoming financially unsustainable (including ‘buy back’ in order to maintain social housing stock)
• Assess value-for-money of the shared ownership scheme, both for shared owners and for the public purse.

Sue Phillips, author of the report, said: “Undoubtedly, shared ownership can offer benefits to people who aspire to own their own home. But downplaying potential hazards may lead to unrealistic expectations, followed by dissatisfaction and even financial hardship further down the line.

“It’s vital that homebuyers are provided with the information and resources they need to make informed purchase decisions, and to successfully navigate their pathway through this complex and risky housing scheme.”

The report is available via the Shared Ownership Resources website.