Shared ownership – ‘part-buy, part-rent’ – is failing in its designed purpose to help low to middle income Londoners into full owner occupation.
The London Assembly Housing Committee report ‘First Steps on the Ladder’ [1] looks at the Mayor’s plans to help Londoners access affordable home ownership. The report finds:
the continuing rise in house prices could jeopardise the long-term affordability of the shared ownership model – one scheme in Shoreditch, for example, had a minimum income requirement of £65,617, just £383 shy of the maximum income threshold of £66,000 to qualify for shared ownership housing
while the Mayor acknowledges that households on middle incomes – those earning between £11,000 and £38,000 – suffer badly from high rents, lower wages and restricted access to social housing, half of households that purchased shared ownership homes in 2013-14 had a household income of £39,200 or more [2]
lower-income households from expensive parts of London could struggle to access shared ownership housing, if councils in cheaper areas only allocate it to their own residents
a survey of shared owners found evidence that few households can afford to increase the proportion of their home that they own – known as “staircasing” – promoted as one of the primary benefits of shared ownership.[3]
The report recommends that the Mayor considers how to retain the long-term affordability of shared ownership homes as part of his investment programmes, and develops alternative models of affordable ownership – such as Community Land Trusts.
Darren Johnson, Deputy Chair of the Housing Committee, said:
“Many renting Londoners aspire to own their own home, but soaring house prices are making this harder and harder.
“Nurses and teachers are the kinds of essential workers shared ownership was designed to help – but increasingly people in that income bracket are finding themselves priced out.
“Even current shared owners on comfortable incomes are finding it a huge slog to buy extra shares in their home, as prices rocket further and hefty service charges raid their wallets.
“The Mayor should help ease the crisis by developing homes for community ownership, and working with the government to provide shared owners with proper legal protection.”
Notes for Editors:
The report, F'irst Steps on the Ladder', is available at the bottom of this page.
According to KPMG, the median London income is £28,000 – though house prices mean an average of £77,000 is needed to get on the property ladder.
A survey of current, previous and aspiring shared owners was carried out online on behalf of the Committee. An appendix summarising the findings is available below.
Darren Johnson AM, Deputy Chair of the Housing Committee, is available for interview – see contact details below.
As well as investigating issues that matter to Londoners, the London Assembly acts as a check and a balance on the Mayor.
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