A multibillion-pound programme to build shared ownership properties in England is needed if 1.8 million “forgotten families” are to ever have their own homes, housing charity Shelter said.
It said three-quarters of households earning £20,000 to £40,000 were now priced out of buying a family-sized home and a lack of social housing meant they faced the prospect of years of private renting. Even when the second part of the government’s Help to Buy scheme goes live in 2014, offering a taxpayer-backed guarantee to encourage lenders to offer 95% mortgages, Shelter said three in four families would still be unable to raise enough money to buy an average three-bedroom home in their area.
The charity said these families needed a “game-changing offer”, which could be built on the shared ownership model, where buyers co-own a property with a housing association. Unlike traditional schemes, it said new shared ownership properties should have priced pegged to local markets, be available to families who can afford just a 12% share, have consistent eligibility criteria and long-term political backing, and be directly linked to a new supply of homes.
It said a government investment of £12bn could build 600,000 shared ownership homes, enough to give almost half of England’s private renting families the opportunity to buy.
Kay Boycott, director of campaigns and policy at Shelter, said: “Years of piecemeal policies and an alphabet soup of confusing schemes have meant that shared ownership has failed to reach its potential, leaving it nowhere close to meeting the needs of England’s forgotten families.
“But for the many young people desperate to do what generations have before them and find a stable home of their own, a national shared ownership programme is the bold and radical solution we need.”
Figures from the Council of Mortgage Lenders have highlighted how much potential buyers need to earn in some areas of the country. Data for the second quarter of 2013 showed that the average salary for a first-time buyer in London had reached £52,000.