New white paper urges government reform of shared ownership

If the thresholds aren’t adjusted for earnings growth, the lender believes these risks will create a situation where shared ownership locks people who have no other routes onto the housing ladder out of the market, which could undermine both demand and supply.

In addition, it calls for a review of Homes England’s Capital Funding Guide to create a more standardised approach.

Rob Barnard, intermediary relationship director at Pepper Money, presented the report, Shared Ownership – A Vital Bridge to the Housing Market, to Downing Street.

The recommendations come ahead of the publication of the expected detail around grants in the new Social and Affordable Homes Programme in the autumn.

The report was developed with input from Rob Thomas, a former Bank of England economist, and David Gauke, a former chief secretary to the Treasury.

Mr Barnard said: “Shared ownership offers a vital bridge to the housing market for so many people who otherwise would struggle to buy their own home, but we know, without action, this bridge will get harder to use for those who need it.

“Our policy recommendations are pragmatic, cost effective and provide certainty for the sector to ensure that shared ownership continues to be the vital pathway to homeownership so many rely on.

“The government has rightly outlined their ambition to build 1.5 million homes by the next election, and that can only be achieved by supporting a range of types of homeownership, including shared ownership.

“The unintended consequence of the status quo is a less viable tenure, with shared ownership becoming less accessible for financially capable people seeking their own home, and has the potential to undercut the government’s own bold housebuilding ambitions.

“At Pepper Money, we see people achieving their housing dreams through shared ownership and we are committed to doing what we can to ensure this can continue. We’ve taken our message and our request directly to the heart of the government, and into the hands of the prime minister’s team, and we urge them to act in the forthcoming Affordable Homes Programme to give certainty and a successful future to the tenure.”

The report comes amid growing concerns over the shared ownership model. A 2024 report by the Levelling Up, Housing and Communities Committee (now the Housing, Communities and Local Government Committee) found that uncapped service charges, rising rents and unfair maintenance costs mean shared ownership is unaffordable, and that owners are left “regretting having made the purchase in the first place”.

Among other recommendations, the report said the government should improve lease terms for shared owners through ensuring they are only liable for repairs and maintenance costs proportionate the size of their stake in the property.

Emails obtained by Inside Housing after the report revealed that the Ministry of Housing, Communities and Local Government and Homes England were “unimpressed” by the suggested recommendations.

Earlier this year, the Shared Ownership Council, a cross-sector initiative, created a new shared ownership code. The council hopes this will improve customer service and satisfaction through creating a standardised model that providers can sign up to.

Last week, Inside Housing reported how shared owners of a block in Battersea could be left footing the bill for services provided to private flatowners on a large estate as housing association Notting Hill Genesis seeks to challenge an earlier tribunal ruling.