Government ‘lacks essential data’ to monitor shared ownership affordability, NAO report finds

Gareth Davies, head of the NAO, said: “Shared ownership remains an important route into homeownership, but it is complex, and weaknesses in information, affordability, data quality and redress mean that government does not yet have a full understanding of how the model works for consumers.”

It also identified concerns around the redress process for shared ownership, noting that it is “complex” and shared owners “may not know all the routes of redress and advice available to them”.

MHCLG confirmed last month that it is “considering improvements” to the shared ownership model after new data revealed that less than 1% of owners staircased to 100% last year.

The report recognised that the new Social and Affordable Homes Programme will give “greater consideration to long-term customer affordability, increasing transparency and fairness on costs”.

It also pointed to the new Shared Ownership Code, a provider-led initiative that launched last year and aims to standardise information about processes and costs for shared owners.

MHCLG told the spending watchdog that full ownership of the property is “not the only positive outcome” because a shared owner who “buys a share and stays at a certain level of ownership still gains stability, builds equity, and is typically financially better off than remaining in the private rented sector”.

The annual delivery of new shared ownership homes has increased in number over the past decade from 11,128 homes in 2014-15 to 20,353 homes in 2024-25, when these homes made up 11% of the supply of all new builds.

“The increase in building is due to an increased focus on shared ownership through affordable housing grant funding since 2016,” the NAO’s report said.

Since the closure of the Help to Buy scheme and the introduction of new restrictions on Right to Buy, shared ownership is now the largest government-supported homeownership scheme for new owners, the report found.

Sir Geoffrey Clifton-Brown, chair of the Public Accounts Committee, said it is “wholly unsatisfactory that people who have relied on shared ownership to get a foot on the property ladder have been faced with cost pressures and complexities”.

He continued: “Rental increases, service charge rises and, in some cases, building safety concerns have led to unsustainable costs over time, with some owners experiencing difficulties in selling their properties.

“If we really want to help people own their own home, it is incumbent on the government to see how they can make this scheme work better.”

Alistair Smyth, director of policy and research at the National Housing Federation, said he recognises that shared owners have “faced challenges and that service charge increases in particular can be a significant financial burden”.

He said: “This is why we fully support and would encourage all housing associations to adopt the Shared Ownership Code, an initiative that codifies best practice, including strengthened transparency on fees and clarity on where responsibility lies with complaint-handling.

“Through this we can address many of the issues identified in this report, providing better information for buyers and ensuring the system works fairly for everyone.”

Sue Phillips, founder of Shared Ownership Resources, welcomed the NAO’s investigation and the finding that improvements to CORE data will result in a better understanding of the journey from initial purchase to full homeownership.

“However, it is vital to recognise that the majority of shared owners do not transition to full homeownership. In fact, some find themselves trapped in increasingly unaffordable homes with no viable exit route,” she said.

Ms Phillips added: “The scope of the NAO report does not extend to making recommendations. It is a matter of urgency to develop a comprehensive and granular understanding of the long-term, lived experience of shared ownership (including problems faced by people who inherit shared ownership homes).

“This is necessary to identify win-win solutions to the various challenges faced by shared owners, in order that the scheme genuinely delivers on its promises of affordability and a meaningful pathway to full homeownership.”

A spokesperson for the Shared Owners’ Network (SON) said the NAO’s investigation “lays bare successive governments’ failure to properly monitor outcomes for shared owners”.

They said: “At a time when the government is committing billions more to the scheme, it is deeply worrying that it does not collect data on how households leave shared ownership, including whether exits are due to financial distress. Without this information, it is impossible to assess whether the scheme is achieving its intended objectives or placing households at risk.

“Affordability over time is critical for shared owners. It is worth pointing out that changes to the scheme for new entrants do little to help existing shared owners, many of whom remain trapped in homes that have become increasingly difficult to sustain or sell.

“The government’s continued reluctance to assess the full shared ownership lifecycle leaves households who purchased homes marketed as ‘affordable’ exposed to significant financial hardship.”

The SON is calling for the NAO to launch a value for money investigation to determine whether the product is actually affordable, meets its policy objectives, and makes effective use of public funds.

A spokesperson for MHCLG said shared ownership “has an important role to play in supporting households into homeownership”.

They continued: “We are aware of challenges faced by some who have entered the scheme, but we have already strengthened shared owners’ rights, made sure there is greater transparency and fairness of costs, and enhanced data collection.

“We continue to explore what more can be done to improve the experience of shared owners.”

MHCLG also said the Leasehold and Freehold Reform Act 2024 and the Renters’ Rights Act 2025 will both strengthen shared owners’ rights.