More than three million households have been priced out of home ownership since the 2008 financial crisis according to new research that highlights the growing role of shared ownership in tackling the UK’s housing crisis.
Specialist lender Pepper Money has published a white paper, Shared Ownership – A Vital Bridge to the Housing Market, which estimates that 3.3 million fewer households have managed to buy homes compared with the levels expected had pre-crash trends continued.
The study, written by economist Rob Thomas with policy input from former cabinet minister David Gauke, argues that shared ownership is becoming a crucial route onto the property ladder.
The research draws on data from the Department for Levelling Up, Housing and Communities, UK Finance, Land Registry and the Financial Conduct Authority. It shows that shared ownership now accounts for 13% of new build completions but still represents only around 1% of total housing stock.
OUT OF REACH
Rob Barnard, Intermediary Relationship Director at Pepper Money, said: “For many people today, the dream of owning a home feels increasingly out of reach. So much so that our paper estimates that 3.3 million households have missed out on entering the housing market since the financial crash.
“House prices have soared, wages haven’t kept pace, and the cost of renting makes saving for a deposit harder than ever. That’s where shared ownership comes in, and we believe this should be an option for more people.”
CHANGING CIRCUMSTANCES
The paper identifies a growing role for specialist lenders in supporting households that do not meet the rigid criteria of high street banks.
Pepper Money reported a 21% increase in shared ownership lending last year, reflecting demand from buyers whose financial circumstances may have been complicated by divorce, redundancy or illness, but who remain capable of meeting long-term commitments.
According to Pepper, its shared ownership borrowers in 2023–24 had average household incomes of £55,000 – well above the market-wide estimate of £37,000.
AFFORDABILITY
They were also more likely to be older and purchasing as couples. Half of Pepper’s shared ownership customers had no adverse credit history.
Affordability remains a defining factor. The report found that the average shared ownership buyer last year acquired a 40% stake in a £313,100 property with a £22,800 deposit and £99,200 mortgage.
By contrast, the average first-time buyer in England faced a deposit of £68,600 and a £223,000 mortgage.
In London, deposits for outright ownership averaged £155,000.
Pepper said that without shared ownership, many of these buyers would have been permanently excluded from the housing market.
