On the dawn of Shared Ownership week, research reveals the scheme is nothing more than a sticking plaster solution without better government support and more partnerships between private housebuilders and housing associations.
While Help to Buy has been cemented into public consciousness by government campaigns and housebuilder promotions, its less-known cousin has received little publicity. A YouGov survey, commissioned by housing association Aster Group, found that the government is falling short at educating people about shared ownership.
The study of more than 200 shared ownership homeowners in the UK discovered that only 14% had received information from the UK government website on the scheme.
More than half (52%) of those surveyed didn’t know that they could move from their existing home into another shared ownership property. Only 10% had successfully grown their equity stakes and just over a quarter (27%) knew they could move into another shared ownership property – yet didn’t know the process for doing this.
When asked what would make the process easier, 40% of those who had staircased said lower or no stamp duty on the higher ownership thresholds. A further 25% said a simpler mortgage application and 25% said a better understanding of staircasing.
As well as government, the report discovered areas where the housing sector could also be doing more. Although less than a fifth of respondents found it difficult to get a mortgage for a shared ownership property, issues with complexity and communication around how the process works were found to be creating barriers.
Most (62%) respondents said they were likely to recommend shared ownership to a friend or family member. But of those who wouldn’t, 59% said they found housing associations difficult to deal with and just under half (49%) said there were unexpected fees associated with buying and living in a shared ownership home.
Amy Nettleton, assistant director – sales and marketing at Aster, said, “Shared ownership has moved on considerably from the model that existed 10 years ago. Both the government and the housing sector need to up their games and do more to communicate how the scheme has evolved to be fundamentally better now than it was in the past.
“Our research has shown that there is still a lack of clarity around how shared ownership works and how buyers can get the most out of it. Part of this challenge is that the model differs from housing association to housing association. What’s needed is a unified approach that is led by the government and bought into by the sector.”
While the government has promised housing associations billions of pounds over the next 10 years, Shared Ownership was conspicuously absent from Theresa May’s speech at the National Housing Summit.
Bjorn Howard, Group CEO of Aster, said, “The Prime Minister’s long-term pledge is welcome recognition of the critically important role housing associations have to play in tackling the UK’s housing crisis over the next decade.
“What was missing from the Prime Minister’s announcement was any mention of other forms of affordable housing, like shared ownership, that have the potential to help many thousands of people to get onto the housing ladder. As a nation, we still look at housing as a binary choice between renting or buying, much as we did in the 1950s.
“We’ve argued for a long time that policy makers need to ensure that the government puts a priority on promoting shared ownership, by positioning it on an equal footing to Help to Buy, for instance. And inequalities, such as the fact that first-time-buyer stamp duty relief isn’t available on all shared ownership properties, need to be removed.”
While schemes such as Help to Buy and Shared Ownership are popular and prop up demand, critics argue that they shouldn’t distract from the issues which called for their existence in the first place.
“However, shared ownership ignores the core issue of the housing crisis, which is the amount of truly affordable homes being built,” said Guy Horne, co-founder of HS Property Group. “A smaller share of existing houses is a short-term resolution, and it is important to start thinking long-term.
“As more people qualify for the shared ownership scheme, the demand is increasing. As a result, the supply of new builds decreases and house prices rise, making affordability an issue again. Instead, private property developers and housing associations must work collaboratively to increase the supply of genuinely affordable homes in desirable areas.”