The industry needs to support Shared Ownership

This week, I want to put the spotlight on Shared Ownership. It deserves to be treated as a genuinely viable route onto the ladder, and that requires lenders to look hard at how they support it.

First and foremost, that’s about the clients getting into Shared Ownership in the first place. But it doesn’t stop there. Once they’re in, we need to make it as easy as possible for them to staircase, and that means really reviewing how that process works.

On staircasing, there’s encouraging progress. Many housing associations are refocusing on helping customers do exactly that, and those leaning into education and proactive conversations are seeing real success.

It’s a big focus for us at MAB too, because the more buyers understand the journey from the outset, the more confident they are about taking the next step.

Where we currently have an issue is service charges. Housing associations are crying out for regulation of the managing agents that set the charges, so that caps are realistic and manageable, and costs can’t spiral out of control.

Part of the issue is that buyers don’t always fully understand what they’re getting into, which is why earlier conversations and better education matter so much.

But there’s a lender angle too. While managing agents set service charges on behalf of housing associations, lenders apply their own limit on how high a charge they’ll accept before declining to lend.

That limit has traditionally sat at around 1.5%, but with inflation pushing charges up, many properties are now creeping closer to 2%.

Where lenders haven’t reviewed that limit, some properties are falling outside criteria and are no longer mortgageable, which is a real problem for the people living in them and anyone trying to buy them.

It’s a question for lenders whether that rule, whether it’s a Shared Ownership property or not, is now out of date.

Like the lender limit, the scheme’s income caps have stood still while the market has moved on. The government sets them, but lenders do have a voice in that conversation.

The caps of £90,000 per household in London and £80,000 elsewhere haven’t moved in around 10 years, despite everything that’s happened to house prices.

If we want these schemes to reach people on middle incomes, those thresholds need reviewing.

So my callout to lenders is simple. What are you doing to support first time buyers looking at Shared Ownership? What are you doing to support them once they’re in? And is the leasehold service charge rule you’re working to still fit for purpose?

Shared Ownership can be a genuine route onto the property ladder for first-time buyers, but only if the industry keeps pace with the people relying on it.