Insight from Orbit, Ipsos Mori, National Housing Federation, CORE, National Housing Group and Savills on Shared Ownership 2.1 – Towards a fourth mainstream tenure: taking stock
Yesterday I learned that I share a birthday with Milton Keynes – although Milton Keynes is a new town, it is still nearly a decade older than myself.
Today I learned that Milton Keynes has over 6% of its housing under Shared Ownership – the fourth mainstream housing tenure.
I am infinitely happier today to share my birthday with Milton Keynes than I was yesterday. Why? Because I respect all that seize an opportunity and make it happen.
If you don’t have the funds to buy a property, shared ownership enables you to buy a percentage of a new home, using a mortgage and a deposit, and rent what’s left from the housing association which built it. In the meantime you can buy an increasingly large share at given opportunities with the eventual aim of owning 100% of your own, leasehold, home.
‘Shared Ownership’ is a product that both increases supply (how many times have we bewailed the housing supply conundrum?) and supports home ownership. It offers prospects to those who can’t believe they will ever get on the ladder, without having to wish for a market crash to the detriment of those already clinging to a rung.
It is a product for the aspirational and the progressive and I’m proud to have had my eyes opened to such schemes as I work with Catalyst Housing.
This Government is committed to investing £1.4bn in shared ownership schemes and is focused on delivering 135,000 shared ownership homes by 2021 through the HCA and the GLA. Meanwhile Orbit Group analysis has shown that a two-bed shared ownership home is cheaper than privately renting in 87% of England’s local authorities and the average share bought is 43% so this is not a marginal tenure.
Is this starting to look like a ‘no brainer’? You can actually own between 20% and 75% of your property from the outset and hey presto you’re on the ladder while private renting outright perhaps takes you further away as property values continue to rise.
Yes, they may flatten out this year but the latest research from JLL Residential suggests that new homes in Greater London will rise more than 19% by 2021 – where else do you stand to make such growth on an investment in such a short period of time, enjoy all the benefits of a new home, pay below market rate on the rented share and have the opportunity to work towards outright ownership?
Note that shared ownership is most accessible, and therefore most popular, in high value areas although in prime value areas it is often still sadly out of reach for many but the product is constantly evolving and expanding.
Recent amendments to the policy allow shared owners to apply to move on to another shared ownership home so as your family grows you can move on without losing your advantage. Indeed the Government has also removed restrictions on the size of a home a household can buy under shared ownership so even if your family stays the same but your aspirations for space grow the options are still there.
Who provides Shared Ownership housing? Since 2001 over 100,000 shared ownership homes have been developed across the country by Registered Providers and on a smaller scale by some private developers.
According to the National Housing Group there are 14,000 homes in the development pipeline and an ambition to build 20,000 more and yet the highly respected research team at Savills has identified capacity for nearly 60,0000 shared ownership properties a year in the UK. Surely this is a clear opportunity for developers whether registered providers or otherwise.
So who knew? Or rather who KNOWS about shared ownership? Perhaps surprisingly 34% of the public is aware of shared ownership compared to only 28% aware of the Help to Buy equity loan scheme (Ipsos MORI) but that still leaves a majority unaware. So, spread the word, share the word, shout the word from your rented property roof tops #sharedownership could dramatically change your life as well as where you live it.
Perhaps it’s the Aquarian “Your poise and generous nature serve you well today” or being on the cusp of Capricorn “You refuse to be restrained” – that has put Milton Keynes ahead of the game on this one – acknowledging that 6% is still pretty low!
Either way as a Growth Consultant focused on securing the very best in individuals and organisations through humanism and progression, I shall remain proud to share a birthday with the modernist new-town of the 60s which has been copied the world-over in design. Let’s hope for a replication nationwide – at least – in its sentiment to new opportunity.
For more details on shared ownership housing:
Most housing association websites will give you full details on qualifying criteria. Check out Catalyst, building in London and the South East, as a starting point. Catalyst Guide
Or to find your local Help to Buy agent
Download the full report from Orbit and CIH.