“It’s time for an honest conversation about the future of shared ownership. The world of shared ownership has increasingly come under the media spotlight. Negative headlines on an almost daily basis have undermined public trust in a product that has become an integral part of registered providers’ business strategies”, say Housing Quality Network (HQN).
So they organised an online event on 12 March 2021 – We need to talk about shared ownership – to look at current practice, future policy, opportunities and risks from every angle. My angle was shared ownership from the perspective of shared owners. I’ve attached my Powerpoint presentation – please click on the picture below to take a look.
I’ve also summarised a few observations from the event which first-time buyers and shared owners might find interesting or relevant to their own situation. Hope it’s useful.
- The Government are committed to rolling out shared ownership; it’s one of their top priorities.
- The rationale is that over 60% of social tenants say they would prefer to be owner-occupiers if they had a free choice. (Seemingly overlooking the fact that shared owners aren’t owners in law, but tenants).
- Shared ownership schemes will run alongside other schemes including Rent to Buy and Right to Acquire, Government aim to increase the options available. (How first-time buyers will react to a potentially bewildering array of options remains to be seen).
- Government’s proposed reforms to make it easier and cheaper to extend leases (990 leases and zero ground rents) may take 2-4 years to come through (if they do come through in their current form). Which creates a dilemma for any shared owners currently approaching the 80-year threshold.
- Some in and around the housing world hold strong views that shared ownership should be not be an ‘investment’. It’s one reason there’s resistance to shared owners subletting, for example. Although someone should probably tell the marketing teams….
“Shared ownership was an opportunity for us to invest in something of our own”. (Terry Harvey, SO Resi Ealing resident – Shared Ownership Market Review, CCHPR, SO Resi)
“It’s an investment. It’s a way of putting your money into property, even if you can’t afford to buy on the open market.” (https://sharedownership.net/what-it-means).
- Contrary to popular belief, shared owners may have a statutory right to lease extension. But, for complicated legal reasons, that right is not exercisable. (Which is not so different, in practice, from not having the right in the first place).
- New reforms allowing shared owners to staircase in 1% increments assume they will do so on a cash basis, and won’t need to spend money on legal or financial advice. Which raises questions as to what support there will (or won’t) be to assist them in assessing what decisions are in their own best financial interests: for example, spending money on a 1% increment, or using that cash to pay off part of their mortgage?