Government’s shared ownership reforms ‘won’t boost housing numbers’

Government proposals to relax the rules around shared ownership will do little to address the issue of how the country builds more homes, according to industry figures.

Housing secretary Robert Jenrick yesterday announced the government was considering a new model for shared ownership which would allow homeowners to acquire additional shares in 1% increments, rather than the current minimum of 10%.

Jenrick said the move would “help to fulfil the prime minister’s priority to level up the whole country, closing the opportunity gap and helping millions of young people into home ownership”.

Industry figures were concerned the proposals would help some but hinder others.

Tamara Hooper, policy manager at the RICS, said the government’s announcement “should be part of a wider and comprehensive strategy to increase housing supply across all tenures”.

A lack of supply was driving prices and compounding affordability issues, Hooper said, and while changes to shared ownership may make a difference to some, “it is a complex legal process and the purchase of 1% may be more complicated and ultimately more expensive than if the 1% had not been bought.

“We look forward to government releasing more detail about how this announcement will work in reality.”

And Marc von Grundherr, a director of property agent Benham and Reeves, said that while the proposed changes to shared ownership were a novel idea, as with initiatives such as Help to Buy they would fuel demand rather than address any real supply imbalance.

“While helping those in shared ownership will provide a leg up to some, the 200,000 homeowners in this position account for less than 1% of UK properties.

“Reducing the barrier to homeownership via shared ownership properties doesn’t supply more homes and it will be interesting to see if any concrete strategy on doing so comes from this latest government rhetoric,” von Grundherr said.

As well as overhauling shared ownership, Jenrick said he would look to reform the planning system and other measures could include increasing the number of homes sold at discounted prices to those people trying to get on the housing ladder, funded by developers as part of their planning obligations under S106.

A spokesperson for the Ministry for Housing, Communities and Local Government said: “As we develop our proposals we will work with private housebuilders on the design of this product.”

Jenrick said: “My mission is to increase the number of homes that are being delivered and to get more young people and families onto the housing ladder, particularly those on lower incomes.”

The minister said Help to Buy, the cut to stamp duty and the government’s homebuilding programmes were “already making a real difference, but I am clear we need to go much further if we are to make the housing market work”.