Shared ownership is touted in some quarters as the answer to the housing crisis, but, as Harriet Meyer’s piece in yesterday’s Observer finds, existing schemes don’t seem to help anyone who needs it.
The idea is that people who can’t afford the full price of a house can buy, say, a quarter of it and rent the rest, which is typically cheaper than renting 100% and also lets them build up an asset. It was designed with “key workers” in mind – those public servants like nurses or teachers who have to spend their careers in areas that are not affordable on a modest salary.
The trouble is that houses and flats in London that the government considers to be “affordable” are only a fraction cheaper than houses on the open market – including a one-bed Marylebone flat with a price tag of £700,000, which no one on an average income would be able to afford. A household would need to earn £128,000 to be able to afford a home like that but could probably opt for full ownership anyway if they were happy not to live in central London.
The nurse featured in the article says she could afford a cheaper flat, but is earning far less than the income threshold the scheme requires.
Even if people on ordinary incomes could access shared ownership schemes, they are little more than a sticking plaster on a broken housing market where house prices have been allowed to rise too high. We need a model to deliver genuinely affordable new housing and doesn’t prop up property prices.