Housing Associations and policy makers can play a key role in unlocking the potential for shared owners to fully own or to resell their share in their homes according to a new report.
‘Understanding the second-hand market for shared ownership properties’ by the Cambridge Centre for Housing and Planning Research was commissioned by Thames Valley Housing (TVH). It showed that shared ownership continues to remain a popular route for first time buyers to make their first step onto the property ladder and second hand sales of shared ownership properties are currently faster than sales on the open market.
But it also revealed that shared ownership properties are resold less frequently than open market properties.
Staircasing (whereby the shared owner buys out the housing association’s share of the property) is also taken up only by a minority of shared owners. Of 145,000 shared ownership purchases identified in England since 2001, only 27,908 have staircased to 100% ownership.
Kush Rawal, Assistant Director, Sales & Marketing at TVH said “This report proves that shared ownership is still a popular product and properties continue to be in high demand. The findings give us insights that provide a real opportunity for the industry to work together to help our customers realise the opportunities shared ownership offers. That means making sure we do what we can to help people that want to own a 100% share of their home, or to sell their share and move on.”
The report identifies several factors which affect the number of people who staircase including transactions costs, limited availability of mortgage finance and housing associations not providing enough information. At the same time, negative equity, high upfront costs and inability to move to another shared ownership property all play a part in restricting shared owners from moving out of their property.
Mr Rawal says TVH will tackle these issues by focusing on a number of specific measures while urging other housing associations to support their plans. These include:
- Working with other housing associations to reduce the cost of staircasing and reselling for customers by ensuring costs are only charged after owners sell their property.
- Encouraging shared owners to buy their home with a higher initial deposit to give them protection against negative equity during a downturn or in when house prices are stagnant
- Increasing mobility by giving shared owners who want to move within the sector the same priority that social housing tenants currently receive
- Having a more open dialogue with customers both when they make the decision to buy and while in their homes so they know what options are available to them
Mr Rawal said, “Buying a home is one of the most important decisions people make in their lives and shared ownership provides much need access to secure, quality housing. By focusing on these measures and moving towards market based principles we can ensure shared ownership is an even more satisfying product for the purchaser.
Read the report
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Contact
For more information please contact Thames Valley Housing:
Alex Noonoo. Tel: 020 8607 0622. Email:alex_noonoo@tvha.co.uk.
Notes to Editors:
Thames Valley HousingThames Valley Housing is based in Twickenham, South West London and houses a wide range of people who have many different needs. Founded in 1966, the association owns, manages and administers loans for over 16, 500 properties in London, Berkshire, Surrey, Hampshire, Oxfordshire, Buckinghamshire, Wiltshire and Sussex, and has 364 properties under construction. Thames Valley Housing provides affordable rented homes, shared ownership, market rent, student and key worker accommodation, working with eight NHS Trusts.
Cambridge Centre for Housing and Planning Research
Cambridge Centre for Housing and Planning Research is a research centre based within the Land Economy Department of Cambridge University and undertakes policy-focused research.
The research included a survey of housing associations with significant shared ownership stock across England to collect data on resales and staircasing activity. In total 52 out of the 120 housing associations invited completed the survey, covering 54% of the total shared ownership stock in England. Four Local HomeBuy Agents, operating in different parts of the country, and other national stakeholders were also interviewed. A teleconference of four lenders to the shared ownership market was organised with the assistance of the Council of Mortgage Lenders (CML). In total, six lenders representing some 60% of UK shared ownership lending by value were involved in this exercise.
Three focus groups, held in early 2012 in Twickenham and Reading, involved a total of 33 shared owners and in addition, eight telephone interviews were carried out with shared owners. The shared owners were drawn mainly from Thames Valley Housing Association and lived in the South West London/Reading area.