Report: Shared ownership should be long-term tenure
Shared ownership should be seen as a long-term tenure for many households, according to a new report
The report, Understanding the second hand market for shared ownership properties, published last Thursday by the University of Cambridge for housing association Thames Valley Housing, says shared ownership is a long term-tenure for the majority of households involved.
It says: ‘Although regularly portrayed as a ‘stepping stone’ into ownership, for the majority of existing shared owners shared ownership is a tenure for the long-term.
‘Indeed, many never achieve full ownership. This is possibly inevitable given the policy objective of prioritising those least able to afford full owner-occupation.
‘Unless they experience substantial improvements in incomes relative to house price growth, or want to move to a smaller property or cheaper area, they are unlikely to be able to access full ownership.’
The report warns that shared owners who own shares as low as 25 per cent of a property may not be willing or able to invest in the maintenance of their home. This could put associations’ assets at risk, the report says.
A balance needs to be struck between allowing people access to properties via low entry shares and ensuring people will be able to use shared ownership as a stepping stone to full ownership, the report says.
It adds: ‘It would be sensible to review the minimum level of shares sold with a view to helping ensure that new purchasers are better placed to move to full ownership over time.’
The report also found that shared ownership properties are sold less frequently than open market properties and only a minority of shared owners ‘staircase’ (buying out the association’s share of the property). The report cites Tenant Services Authority data showing less than one per cent of the 144,733 shared owners in England staircased to 100 per cent of the property value in 2010/11.
Kush Rawal, assistant director at TVH, said the association will now work with other landlords to reduce the cost of staircasing and reselling, encourage shared owners to buy their home with a higher initial deposit and give shared owners who want to move within the sector the same priority as social housing tenants.
Mr Rawal said: ‘Buying a home is one of the most important decisions people make in their lives and shared ownership provides much need access to secure, quality housing. By focusing on these measures and moving towards market based principles we can ensure shared ownership is an even more satisfying product for the purchaser.’