SO Hub: Improving shared ownership

Immediate, mandatory limits on how long a shared ownership flat can remain vacant before the registered provider must offer to buy back the share at market value. This would share the resale risk between the shared owner and the registered provider, instead of the shared owner carrying all the risk and the registered provider having no incentive to ensure the flat is re-occupied within a reasonable time.

MHCLG to have open-book access to registered providers’ shared ownership resales data. Policy teams need full, objective information so they can make fair, evidence-based decisions on reforms. The sector must not be allowed to set constraints around what data is provided (versus what can remain hidden). Factors like the age of an OPSO development, the size of the shared owner’s % share, or even the number of bedrooms are likely to materially affect the level of risk of a flat failing to re-sell.

Prospective buyers to be given information about the actual probability of resale problems, based on historic data for the sector (not the scheme!) and guidance on how to estimate the extent of the financial risk. The OPSO Key Information Document simply states that costs remain payable until a property is resold. This is ineffective as a risk warning, because it does not make clear that the time taken to resell may be massively longer than prospective buyers would assume.

Equal consideration in guidance, leases and regulation for shared owners’ representatives, including Executors and those with Power of Attorney.

Free-of-charge access for shared owners to an independent review, to confirm the reasonableness of registered providers’ interpretations of the Homes England / GLA guidance, especially their decision-making on subletting requests and buyback requests. The reviewers to be consumer and grant-funding body representatives. The registered providers not to be able to dictate the terms of the review.

An obligation on the provider to treat shared owners’ families (who are paying them!) as customers, to respect shared owners’ families’ rights to “their” property, and not to act in ways that disadvantage their ability to resell. Shared owners’ families to have a right to compensation where the provider defaults on these obligations.

Shared ownership provides a vital route into a home for people who could not otherwise afford one. But affordability should not end on the day the keys are handed over – the home must remain affordable to live in. Since 2020, my rent has increased by 38.4%, from £458.64 to £634.64 per month. My current service charge is 21% higher than in 2020, but it has fluctuated dramatically and at one point was 62% higher. Together, my rent and service charge have risen by almost 34%.

People enter shared ownership precisely because they have limited financial headroom. They should not then face continually rising rent alongside unpredictable mandatory charges over which they have little control. I would introduce stronger ongoing affordability protections, standardised year-by-year service-charge statements, full access to supporting invoices, and a meaningful voice for shared owners in the services commissioned on their behalf. A straightforward question about where the money went should always receive a straightforward, properly evidenced answer.

Buyback – This needs to be an actual option in circumstances where people can’t sell or have outgrown their properties. There needs to be a clear policy in place.

Clearer information given to potential buyers and better communication – I had no clue about leasehold, the 80 years, needing a lease extension. Trying to consider my options now, regarding lease extension, is a complete minefield. My HA are being very scant with information and I can’t get a clear view of costs involved. They want nearly £1,500 upfront to start the process but I don’t know if it’s viable until I’ve got a clear view of costs.

There needs to be a fairer system for landlords and shared ownership tenants.

The landlords should take some of the risk. They sit back and earn profits without a second thought, so how about buying back the property at market value! If it’s seen as ‘their’ asset, they should be prepared to buy them back when a tenant wants to move on but can’t because the market is stacked against them.

One simple change would be to remove the ‘always-up’ annual RPI rent increase. It makes the whole concept unsustainable. Why is it necessary? Where did this idea come from?

I have been in my property a long time and the steeply rising rents and service charges over the years with different housing associations have sometimes made a mockery of ‘affordable’ housing. Housing associations should do more to keep costs low for shared owners in terms of rising rents and service charges. And they should have greater awareness that, as shared owners, we are paying both.

Greater clarity when someone moves into their shared ownership property that costs will continue to go up, probably steeply, over the years.

When costs go up, as they will, it needs to be made very clear why these expenses are rising, and by exactly how much.

Greater clarity on sinking funds: how much these cost each month and what you are paying for. I know someone who had a sinking fund introduced very suddenly, and that was quite upsetting.

Better communication generally and greater consideration for the particular needs of shared owners as a specific group. My housing association has recently created a home ownership hub on its website, for example, which seems a step in the right direction.

In general, greater clarity and emphasis on the terms of the lease would be helpful. People need more advice at the start in order to understand lease terms, and to be informed about the importance of keeping their lease contract somewhere where they can easily refer to it if necessary.

Housing providers should be required to ‘buy back’ the property if, say, after 12 months the property has not sold on the open market. This would enable the housing provider to let the property or find a buyer.

I think that the housing provider should have a clear policy on buybacks.

For instance, if the property was proving impossible to sell after a set period of time they would buy the property back so that the deceased estate can be settled and the property could be occupied by someone who needs it instead of standing empty indefinitely.

Is this system fair? Far from it.
Do Anchor care? Far from it.
Does the Government have the will to intervene? Far from it.

‘Jean’s story’ (My SO Home: No. 32) illustrates why reform – specifically buy-back schemes for Government funded Older Persons Shared Ownership (OPSO) developments – is urgently needed.

1. Decouple rent upgrades from inflation (implementing static rent)
Under the current framework, rent on the unowned share typically increases annually in line with inflation (often RPI or CPI plus a premium). This is fundamentally flawed because it assumes the Housing Association’s (HA) underlying operational costs for that specific property are rising in tandem with national inflation.

The reality of costs: The actual ongoing costs of managing and maintaining the building are already covered by the tenant through service charges and management fees.

The proposed reform: Rent on the unowned share should remain static (fixed at the initial percentage rate specified at the time of purchase). Because the HA has already secured the capital funding or debt to build the property, the rental portion should function as a predictable, fixed financial obligation—much like a fixed-rate mortgage—rather than an escalating variable cost.

2. Restructure staircasing based on historical initial valuation
Currently, if a shared owner wants to buy a larger share of their home (“staircase”), they must pay the current market valuation of that share. This mechanism actively penalises the buyer for any house price growth and makes shared ownership exponentially more expensive than purchasing on the open market.

The current disincentive: If a buyer improves the property or the local market booms, they are essentially forced to buy back their own equity growth at a premium, priced out by the very market they tried to enter.

The proposed reform: Staircasing costs should be pegged to the initial purchase price valuation, adjusted strictly for any outstanding capital debt, rather than fluctuating market rates.

1. Landlords/housing associations need to take on some of the responsibility and/or risk for the property commensurate with their partial ownership. I don’t know how this would work in practice, because I can imagine that attempting to get sign off to contribute to an urgent plumbing repair would be a nightmare (for example), but there certainly needs to be a balancing of risk, responsibility, and ownership.

2. It needs to be easier for shared ownership leaseholders to sell their property and move on, either via more straightforward access to the open market or via housing association buyback or similar. This will avoid people who have grown out of the properties being stuck and unable to move on with their lives, whilst putting them back into rotation for those looking for that sort of ‘affordable’ property.

3. A simple, easy to compare form setting out costs of the property now (including service charge, rent, ground rent etc.), and over the next 5-10 years. This should include any major works that are foreseeable such as planned maintenance or repairs.

4. Better service charge management and a statute of limitations on how late money can be collected. Often accounts are both impenetrable and late, making it extremely challenging to ensure that what is essentially leaseholder money is being spent responsibly on their behalf.

I would improve shared ownership by making service charges less of a burden. Here they are set to increase by 10% a year!

The shared ownership scheme could definitely work better for shared owners. Landlords should purchase properties back – regardless of the % share owned – to sell on to new shared ownership buyers. This would enable existing owners to move on when they can afford to. And it would maintain existing social housing stock to allow other people to get on the housing ladder.

When it comes to staircasing and selling it would be fairer to allocate costs between the landlord and shared owner according to the % share owned.

My first point is that shared ownership is not affordable for many. While it may feel great to get on the property ladder initially, the costs start to unravel and increase immediately.

Mortgage rates are higher for shared owners as they are seen as ‘high risk’. I do not know if there is any data to support this, and we wouldn’t be able to find out. But this is not made clear to those applying for shared ownership and therefore is a hidden cost when initially purchasing, remortgaging or staircasing.

Staircasing costs should be capped.

Even if you are allowed to immediately sell on the open market, you need to pay large fees for a ‘selling pack’ that does nothing for you. I’ve been given permission to immediately sell on the open market. But I am aware that this is because the housing association knows it would be challenging to sell on with the service charge fees and cladding works not being as thorough as they should be, leaving us with permanently high insurance costs.

The ‘administration’ fee levied for doing anything should be reviewed. £50 for someone to take less than 60 seconds to make a note on your record is extortionate. Having said that, I have refused to pay it every time it has been levied and it has not been pursued.

Housing associations should be required to widen the criteria for buyback. Buyback policies are opaque, restricted. It appears that the shared owner should almost, if not actually, be homeless before the HA will consider it. Although as pointed out above, they will take into account whether they can sell it on before agreeing to it. There should be a way of them looking at it becoming social housing for people who need it.

All shared owners should automatically get a 150-year lease, including retrospectively for those who did not get one in the first instance. There is an argument for abolishment, but this is a good starting point for those of us already in ‘marriage value’ because of a 99-year lease. My lease is currently at 78 years and if they were to apply it retrospectively it would put it back up to 129 years. The cost of extending the lease is significant and, if it isn’t extended, then to sell through the housing process will reduce the price to account for the buyer having to purchase more years. The only option is to sell outright, which is challenging with high service charges, shared ownership not being value for money and in blocks where there are safety issues that need addressing.

The rent increases should not be according to RPI/CPI and should be realistic. There should be more clarity with my service charges, and this means better communication with the managing agent.

I would like to see an end to lagging in terms of account reconciliation. Lagging often results in money owed not being returned for a couple of years (sitting making interest in their accounts). Or we get a bill for a few thousand to pay over a limited period.

Finally, I’d like to see all shared ownership providers subject to Freedom of Information (FOI) legislation. Housing associations are not public bodies but many are providing services for councils as well as operating shared ownership. Although there is a requirement to publish certain data, this neither ensures nor encourages full transparency. I am aware that as they have a contract with councils, they are by proxy subject to FOI. But I still think they should be directly subject to it (I accept this is a government issue not a shared ownership one).

Transparency has to be key because so much is hidden and misunderstood by customers as well as professionals.

A product breakdown like you get when you buy insurance/mortgage – with pros and cons, and what is/isn’t covered, would be a good start. And projections to give an idea what might happen with rent increases (CPI/RPI), like you get with a pension forecast.

We would like to have leasehold and possibly SO abolished completely as the feudal times are well behind us.

1. Shared Ownership does not currently exist in law. It’s a marketing term for a government scheme. The leases that are written under it vary depending on who is in office, and are a melange of random clauses drawn from various leasehold and landlord and tenant law. A lot of the problems with shared ownership would be resolved if it had a legal basis, and a Shared Ownership Act is vitally important.

2. Service charges are an absolute rip off. No-one who pays rent should have to pay service charge as well, and if the tenant is responsible for 100% of the maintenance of their property, service charges for the building and the areas around it should only be applied once they have staircased to 100% ownership.

3. Service standards should be set out much more clearly than they are at the moment, and tenants should know what service standards they can expect from their landlord before they buy.

4. Rent should be inflation minus 1%, and not the additional 0.5%-5% per year, every year, always increasing, as it is at the moment.

5. Staircasing should be based on the value of the property when it was bought, and not its value at the time of staircasing. No fees should be payable by the tenant to the landlord when staircasing, and each party pays their own legal fees. The amount of rent paid by the tenant should also be factored in to the staircasing premium, and the premium payable by the tenant to staircase should be reduced for every year of rent paid. (There is a precedent for this – “right to buy” in the Housing Act 1980.)

6. Housing Associations and other shared ownership providers should be subject to much more stringent regulation, and overseen by a regulator with real teeth. There is no reason why anyone who buys into a government-led affordable housing scheme should have to engage in David-and-Goliath battles to get their basic legal entitlements, but that is the situation at the moment. Moreover, SO landlords who fall short of the regulatory standards should not be awarded any more public money until they resolve their failures.

7. Complex lease arrangements (sometimes called s.106 agreements) should be banned. No landlord should also be a tenant themselves. Parties to existing complex lease arrangements should be given a fixed amount of time to decide who is buying who out, so that no tenants (shared ownership, social rented, or anything else) have to live with the consequences of these exploitative, buck-passing, profiteering arrangements.

8. Any improvements to the shared ownership scheme should apply retrospectively to ALL shared ownership leases, regardless of whether they were signed in 2006, or 2026.

The Regulator of Social Housing should take responsibility for monitoring and evaluating long-term outcomes for shared owners, against the metrics of long-term affordability and transition to full home ownership. There should be meaningful penalties for poor outcomes and low satisfaction. No provider should receive a C1 rating if overall shared owner satisfaction is below a specified percentage – say, 80%.

All providers of shared ownership, whether registered providers or for-profits, should be required to publish their TSMs for overall shared owner satisfaction on ads.

Government and its agencies should take meaningful action to ensure that no shared owner ends up trapped in an increasingly unsuitable and/or unaffordable home with no viable exit route. Buyback should be more widely available, particularly where shared owners were not properly informed about risks and/or problems selling arise from flaws in the lease and/or wider scheme.