Shared ownership:

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Shared ownership Objectives and experiences of
policy and householdsAnna Clarke, University of
Cambridge
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New Build shared ownership

• Allows households to purchase between 24 and 75
  of a property on a leasehold, whilst renting the
  remaining shared at a sub-market rent from a
  housing association.
• Properties are new-build, or re-sales of new
  build, which are being sold on a shared ownership
  basis

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Types of Intermediate housing

• Low Cost Home Ownership
• Shared equity models
• Shared ownership models
• Discounted market sale
• Intermediate rented housing

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Research Methods

• Two postal surveys with the clients of two of the
  major housing associations in the London area
  specialising in shared ownership. 1146 surveys
  were sent out and 33 returned.
• 21 telephone interviews with some of these
  clients
• Analysis of the Housing Associations client data
  and also of data provided by the London Home
  Ownership Group

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Who was surveyed?

• Survey 1 Those who became shared owners within
  the last 12 months
• Survey 2 Those who became shared owners between
  three and four years ago

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Policy objectives of shared ownership

• Providing opportunities for households who would
  not otherwise be able to afford it to enjoy the
  benefits of owner-occupation
• Meeting pressing housing needs, particularly
  homelessness, both directly and also indirectly
  through the release of units of accommodation in
  the social rented sector (particularly in areas
  of high pressure) and also indirectly by reducing
  pressure on waiting lists
• Providing affordable housing opportunities for
  key workers required to deliver essential
  public services in pressured areas.
• Supporting and contributing to urban regeneration
  and creating more socially mixed and balanced
  communities

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Households objectives (1)
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Households objectives (2)
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Households objectives (3)
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Households objectives (4)
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Households objectives (5)
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Households objectives (6)
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Does shared ownership meet its policy objectives?

• Objective 1 Providing opportunities for
  households who would not otherwise be able to
  afford it to enjoy the benefits of
  owner-occupation
• Sub-questions
• Does shared ownership house households who would
  be otherwise unable to access owner-occupation?
• Does shared ownership offer the benefits of
  owner-occupation?

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Does shared ownership house households who would
be otherwise unable to access owner-occupation?

• Shared owners in these housing associations
  purchasing in 2004/5 had average household
  incomes of 29,200.
• Private sector first time buyers in London and
  the South East in 200/4 had average household
  incomes of 40,300.
• Shared owners had a median deposit of only 500
  (0.3 of property value) compared with 12 of the
  property value in the private sector.

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Incomes of households entering LCHO
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Target client groups for Low Cost Home Ownership
(East London Sub-region)

• Social sector tenants who are unable to meet
  their housing needs in the market
• On LA housing registers within the sub-region
• Resident within the sub-region
• Employed within the sub-region
• Aspire to live within the sub-region

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Previous tenure of LCHO clients
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Previous tenure of private sector first-time
buyers
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Alternatives to shared ownership
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Does shared ownership offer the benefits of
owner-occupation?

• Owner-occupation requires less government subsidy
  than renting. Shared ownership partially offers
  these benefits to the public purse.
• Shared owners largely perceive themselves as
  home-owners, so have a stake in society and
  their neighbourhood much as outright owners do.

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Does shared ownership meet its policy objectives?

• Objective 2 Meeting pressing housing needs,
  particularly homelessness, both directly and also
  indirectly through the release of units of
  accommodation in the social rented sector and by
  reducing pressure on waiting lists
• Sub-questions
• Does shared ownership meet housing needs
  directly?
• Does shared ownership reduce pressure on social
  rented housing?

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Does shared ownership meet housing needs directly?

• Some households entering shared ownership are
  homeless or in severe housing need
• Many are in a lesser degree of need than those
  entering social rented housing and would not be
  the first priority for social housing
• Shared ownership therefore helps households with
  a lower degree of need, but at less cost to the
  public purse

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Does shared ownership reduce pressure on social
rented housing?

• 12 of households in these housing associations
  were moving from the social sector. This is
  typical of shared ownership in London.
• A further 14 of households in this survey
  thought that they would otherwise be likely to
  have ended up on social rented housing.
• The remaining three quarters of new shared owners
  were not looking to social housing to meet their
  needs and/or were not in sufficient need to have
  been housed in this sector.

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Are Households objectives met?

• Households who moved in between 3 and 4 years ago
  were asked what difference shared ownership had
  made to their financial situation, and to their
  lives in general.

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Benefits of shared ownership

• Sense of investment and being on the property
  ladder
• Better quality of life/housing
• Security of housing
• Location of housing
• Independence, pride and status

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The status of home-owning

• Its allowed me to join home-owning masses. As a
  single parent it makes me happier to know that.
• We have escaped from the stigma of social
  housing tenants. We live in a normal street and
  feel proud to feel normal.
  
  
  
• I feel I have achieved (50 of) the goal I
  needed to before my 30th!
  
  
  
  
• I feel more respectable now.

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Affordability
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Difficulties with re-payments
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Conclusions

• Shared ownership offers some of the benefits of
  owner-occupation to a group of households, most
  of whom would not otherwise be able to access it.
  
• Shared ownership meets less pressing housing
  needs than could be met through social rented
  housing, but it does so a lower cost in terms of
  government subsidy.
• Shared owners generally find that shared
  ownership meets expectations and helps them
  fulfil their aspirations for home-ownership,
  though some struggle to afford it.