Co-Ownership failing?

Posted: 27/7/2016


Repossessions and rent arrears are higher among households in shared ownership than in the private rented sector.

And relatively few of those in the shared ownership sector seem to be ‘staircasing’ up to full ownership.

Estate agents who deal with sales of shared ownership homes might not be too surprised by the findings.

The new new data also shows that occupiers in the shared ownership sector have an average household income of £30,347 – which is 26% less than the average first-time buyer income of £41,000.

However, some households are able to access the shared ownership sector on income as low as £16,341.

Figures obtained by Inside Housing show that 13.1% of shared ownership households are in rent arrears – far higher than the arrears rate of just 1.6% in the private rented sector, although half the average arrears rate in the social rented sector.

The average shared ownership rent in arrears is £496.

In 2014/2015, there were 109 repossessions, representing 0.1% of shared ownership households.

That is five times more than the repossession rate of 0.02% in the mainstream sector.

Shared ownership – which the Government plans to encourage with a huge injection of cash – sets out its stall as a way for people to get on the housing ladder, by taking out an initial small ownership stake in the property while paying rent on the portion they do not own.

Over time, the idea is that they staircase their way up by increasing the size of the stake they own.

But strikingly, in 2014/2015, just 2.7% of shared ownership occupants bought an additional stake.

The data covers 97,501 shared ownership homes, more than half the number of shared ownership properties nationwide, and of that number, 2,595 staircased in that financial year.

Of these, 1,990 households bought their homes outright and 633 bought further shares.

There were also 2,292 resales.

The Government wants to deliver 135,000 new shared ownership homes by 2021, adding to the current number of 188,000.

The Government plans to allocate £4.1bn in grants to support this massive expansion.

All the figures come from the National Housing Group, a body of 52 housing associations.

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