A year of shared ownership

Comment14.12.20by Kush Rawal

Shared ownership isn’t perfect. But, Kush Rawal says, it is still an essential tenure if we want to address the housing crisis

Clapham Park Courtyard – one of Metropolitan Thames Valley’s shared ownership schemes

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A year of shared ownership – Kush Rawal from @MetTVH reflects on the successes and challenges #UKhousing

“Shared ownership isn’t the single solution the housing crisis, but it is an incredibly important part of the answer,” says Kush Rawal from @MetTVH #UKhousing

On the surface, shared ownership looks like a product heavily linked to economic cycles, but our experience has been that it continues to offer a highly resilient housing option for both customers and providers despite external conditions.

And as we head into a difficult period in the economy owing to the pandemic and Brexit, it will continue to show its importance as a tenure that helps towards our wider mission of addressing the inequalities that exist in our society.

This year has really made us more intimate with home; we’ve all literally been confined to our homes and this time has made us evaluate what is important, what we value, where and how we want to live. For the majority of people, options are limited, and that’s not taking into consideration stricter lending criteria.

This is where shared ownership comes into its own. It is a product that gives buyers flexibility, which our customers tell us they value greatly.

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A recent homebuyer told me that he and his partner were living with his parents in lockdown. Having recently sold their business, they had a sizeable deposit, but with stricter lending and uncertainty they had to weigh up the risks when it came to moving.

They didn’t want to rent but they desperately wanted a place of their own. They were looking at properties on the open market, but found that they couldn’t find anything suitable. They happened on the development, and shared ownership enabled them to find their forever home, with space for their family to grow and the opportunity for full ownership if their circumstances changed.

This story is not unusual; this year has been one of our strongest and we have seen record numbers of enquiries, site visits and sales. At the end of March 2020 – also the start of the first national lockdown – we launched three developments, selling out of a development within a month with no face-to-face viewings.

Last month, we had our best month to date, with 59 completions and 70 exchanges, selling out at four developments in Surrey and Berkshire. Consistent feedback from our buyers is they want to move but are priced out of any possibility of full ownership.

“Regarding changes to repair responsibilities, we are cautiously working through the impact of the changes and how they can be sensibly delivered in practice”

Next year we forecast a very similar story, aided by strong support and incoming reforms from the government, who seek to streamline the shared ownership offer and make homeownership more accessible. Adopting our 1% staircasing product, new shared ownership homeowners will be given the opportunity to staircase in a more manageable way: something we have seen great take-up of since we launched SO Resi Plus in 2014.

The right to shared ownership will also potentially open the door for more people to access a stake in a home, although we do look forward to the detail on the repercussions on other affordable housing options. Regarding changes to repair responsibilities, we are cautiously working through the impact of the changes and how they can be sensibly delivered in practice.

We welcome the improved offer for customers but we are keen to ensure that the overarching principal of keeping things simple for customers remains a key consideration for when the final details are released.

Now, I know that there are still more improvements to be made in shared ownership, and together with the National Housing Federation and our fellow shared ownership providers, we are learning from the challenges some people face. Together, we are streamlining shared ownership where we can, and problem solving topics like lease lengths, staircasing and improving knowledge of the product to make it as attractive as possible for all stakeholders.

Internally we are also scrutinising practices to ensure we up our game. Like all operators in the property sector, public, private, commercial and residential, we are evaluating our practices to ensure building safety issues are addressed.

“Shared ownership isn’t the single solution the housing crisis, but it is an incredibly important part of the answer”

Safety is our number-one priority, which is why we are reviewing our entire portfolio and making good progress with our risk-based inspection process to help secure EWS1 certification and progress any remediation works that are needed.

Where issues need addressing, we are pursuing the original developer to put them right and welcome the government funding that has been made available. However, everyone involved in this issue knows that the scale of this challenge will require more government support and solutions to be found to prevent homeowners from selling, buying or mortgaging their homes.

Shared ownership isn’t the single solution the housing crisis, but it is an incredibly important part of the answer, which bridges the gap between renting and full ownership. For many, it provides an option beyond a life in the private rented sector, something which we believe is important if we truly want to address the housing a crisis in all its forms.

Kush Rawal, director of residential development, Metropolitan Thames Valley