Shared ownership is the key to answering the nation’s housing crisis
- - Eight out of ten people think first-time buyers are frozen out of UK housing market
- - Only 60% say they understand the main benefits of shared ownership, a type of housing that could provide people with more choice along with traditional ownership and renting
- - 95% of the population earn under the threshold of £80,000, which means millions of people could qualify
- - Findings included in new report which proposes five recommendations to improve shared ownership
According to YouGov research, commissioned by developer and landlord Aster Group, eight out of ten people (81%) believe Britain’s housing market has become unaffordable for first-time buyers.
Yet only 60% of people say they understand the main benefits of shared ownership, a type of housing that offers a route on to the property ladder with lower deposits and monthly payments. It is designed to be flexible and provides more security than renting as those who own part of the home can live in it for as long as they continue to pay their mortgage.
The findings form part of a report from Aster released today (Thursday 14th September) also including a set of bold recommendations for shared ownership, which has the potential to provide a housing solution for millions more people.
Aster commissioned a survey of 2,000 British adults, conducted by YouGov, which lays bare the public’s lack of understanding of shared ownership. Despite its potential to help a generation of potential homebuyers currently forced to rent, only half of people (52%) know that banks and building societies offer mortgages on shared ownership homes.
When asked about the maximum income threshold to qualify, the majority either didn’t know (42%) or said it would be less than £50,000 (30%). Just 1% knew that, outside of London, it is £80,000 – higher than 95 per cent of the population’s income.
The report, Another way: How shared ownership can improve the UK housing market, features five recommendations including housing associations working more closely to boost the public’s understanding of shared ownership, improving the application process and a Help to Buy-style Government publicity drive to raise awareness and demand.
Some 44% of people surveyed believe the Government should do more to increase the profile and understanding of shared ownership. Currently, one in ten (9%) confuse it with Help to Buy, the state-backed scheme that offers interest-free loans for first-time buyers.
There are 200,000 shared ownership homes in the UK. Despite misconceptions, it is one of the fastest-growing types of housing in Britain, with 25,000 units either under construction or for sale.
Bjorn Howard, Group CEO of Aster, said: “Everyone agrees the UK is facing a housing crisis which is getting worse as more and more people are priced out of buying or renting a home.
“Owner occupation is held up as an aspiration that millions are struggling to achieve. However, there is another choice that many renters and potential housebuyers should consider. Shared ownership blends ownership and renting and can be a great option for many locked out of the renting and ownership markets. It provides life-long security without the huge upfront costs for a deposit that homebuyers face when they use traditional ownership routes.
“Our research highlights clear concern among the British public about how the housing market freezes out first-time buyers, but also a lack of understanding about the role shared ownership could play in changing that. This informs our clear and workable recommendations for everyone involved in providing shared ownership homes.”
The proposals from Aster draw on insight from expert contributors to the report. These include David Jubb of property consultant JLL, Rhys Moore of the National Housing Federation and Kelly McCabe of The Mortgage People, the mortgage advice service.
The five recommendations in Aster’s report are:
- Building a sector-wide consensus that shared ownership supports and does not conflict with the ethos of housing associations, some of whom are ambivalent about offering it alongside their traditional social rent.
- Housing associations working together to raise the profile and understanding of shared ownership. This will help to standardise and enhance the product and customer experience while helping position it as a first-choice option alongside buying using a traditional mortgage and renting.
- Reforming the shared ownership application process and making it easier to staircase – the process by which people increase the amount of equity they own in their shared ownership home – and making the transition between options easier, such as ‘porting’ a mortgage to an open-market property.
- The Government enhancing the shared ownership brand with an awareness campaign to engage and educate the public, building on the success of the highly-publicised Help to Buy scheme.
- The sector and government working together to improve the central web-based portal for home-seekers, to make it clearer and simpler and offer localised information on the best options based on personal circumstances.
Amy Nettleton, assistant director – sales and marketing at Aster, added: “Shared ownership is already helping thousands of people every year, but it could be improved and the reward for this is huge – it’s a solution that is flexible to the needs of a massive cross-section of society.
“Our proposals would enhance the shared ownership product and help drive demand for it across the country, not just in big cities. This is important in pushing housebuilders to develop more shared ownership homes, as well as encouraging more banks and building societies to provide mortgages that support people in accessing it.”
Aster, which owns and manages almost 30,000 homes across the south of England, is investing £1.5bn in new houses between now and 2024. It currently has 1,890 shared ownership properties in its portfolio.
The full Another way: How shared ownership can improve the UK housing market report can be accessed here.