Can shared ownership be made better for Londoners, or is it fundamentally flawed?

Published on May 11, 2020

Published on May 11, 2020

In March this year, Unmesh Desai, Chair of the London Assembly Housing Committee, wrote to the Mayor of London highlighting that “Many shared owners encounter issues with costly service charges, poor maintenance of their property, expensive lease extensions and difficulty staircasing to full ownership”.

He made a series of recommendations to the Mayor, with the intention to ‘make shared ownership better for Londoners’.

We agree that shared ownership is currently a bad deal for those who buy into it, but rather than tinkering around the edges, LTF  believes it’s time the Mayor asked himself if this fundamentally flawed tenure is worth retaining at all in London.

Deemed to be ‘affordable’ housing, all the evidence shows that it isn’t affordable to the vast majority that can’t afford to buy outright.  Shared ownership is also simply not ownership in a legal sense. ‘Shared owners’ are actually assured tenants (albeit for a long term, and with the option to purchase.)

LTF’s view has always been that intermediate housing, of all types, primarily results in relatively better off households jumping the queue for new affordable housing, leaving behind those most in need, who have been languishing for years on local authority social housing waiting lists.

Numerous politicians, keen to gain the middle-class vote in London, neatly identified an unevidenced need – that of the ‘struggling middle income households’ – to justify their support for shared ownership housing.  

Many planning authorities, keen to hit ‘affordable housing’ targets or appease local ‘NIMBYs’, have since promoted delivery of intermediate homes, at the expense of social rented homes; and housing associations, seeing it as a cash cow, have ramped up their delivery. The result? The backlog of unmet need for intermediate tenures was cut from 46,000 to 4,000 between 2013 and 2017, at the same time as the backlog of unmet need for new social rented housing was allowed to snowball from 61,000 in 2013 to 163,000 in 2017. This according to the Mayor’s Strategic Housing Market Assessments.

The knock-on consequences are that more than 58,000 London households are living in inappropriate temporary accommodation and fifteen per cent of social renters (and 12% of private tenants) live in overcrowded social rented homes – during a national lockdown.

We were not surprised when shared owners, realising they’d bought into an expensive and insecure trap, angrily drew their concerns to the attention of the London Assembly Housing Committee meeting in November 2019. This has been fully reported by Leasehold Knowledge.   

We have huge sympathy with our neighbours in ‘shared ownership’, particularly those highlighting issues shared with many housing association tenants, including poor management and lack of transparency in decision-making. It is wholly wrong that  shared owners in the City Wharf development in Hoxton have been told by A2Dominion that they could be liable for 100% of the costs of removing timber cladding, despite some ‘owning’ as little as 25% of their home.

We would agree with Desai’s statement that “We are also concerned that shared ownership is not the best form of affordable housing to meet Londoners needs”. However, the proposed solution; “building of more London Living Rent homes which are better suited to normal people on working incomes”, misses the mark.

LTF has always deemed shared ownership to be a con – an ‘affordable’ tenure that is affordable only to a better off minority. London Living Rent is little better. Ambitious targets for new social rented housing are what is needed under the draft new London Plan, and are sadly lacking. If put in place and met, these would directly meet the need of those worst affected by London’s housing crisis and have the knock-on effect of easing costs for everyone, including better off first time buyers.