Though almost two months have passed, the affordable housing plans detailed in the Chancellor’s Spring Statement are still being discussed. Though what wasn’t mentioned is an even louder topic of debate.
This article was written by Adrian Plant, Director of SOWN.
In her Spring Statement, which was delivered on 26th March, the Chancellor pledged an additional £2 billion top-up funding for the Affordable Homes Programme. This, it was announced, is intended to provide up to 18,000 new social and affordable homes.
Since council housing effectively ceased four decades ago, the private rented sector has fulfilled an important role in preventing homelessness. Today, with demand for rental properties outpacing supply, it’s good to see the government helping to address this need.
However, it is a significant missed opportunity that the government rarely addresses social housing in its broadest sense – homes for sale as well as for rent.
Shared Ownership is increasingly popular – and necessary. Traditionally, was most popular among those aged between 25-35 (32-37 in London) but the upper age is increasing. Today first-time buyers are paying almost a third more to get on the property ladder than they were five years ago and in the last decade the number of private renters moving into home ownership fell by 23%.
Although Shared Ownership remains limited to those with a maximum household income of £80,000 (£90,000 in London), many people have found that due to average house prices rising considerably more than average incomes, the impact of higher interest rates on mortgages, car and credit card loans together with the cost of food and utility bills, they can no longer afford to buy outright. For this growing demographic, Shared Ownership is the best opportunity to get onto the property ladder.
Most Shared Ownership is provided independently of government grants but to succeed is requires some non-financial government support – simply recognition, a ‘championing’ and an effective communications campaign which addresses some of the myths surrounding Shared Ownership.
At very little cost to the taxpayer, the government could do much more to promote Shared Ownership as an affordable and practical way of addressing this country’s housing crisis and enable first time buyers to get a foot on the housing ladder.
We’re busier than ever responding to unprecedented demand from would-be-homeowners and yet government announcements – everything from the Labour manifesto to the recently published Planning and Infrastructure Bill. Even within the National Planning Policy Framework (NPPF), a reference to Shared Ownership appears just once, in the glossary. Furthermore, the recent increases in Stamp Duty and the freezing of Lifetime ISAs have increased the barriers.
So it was disappointing – but not surprising – that the Spring Statement (just like October’s Budget before it) failed to address the significant barriers that prevent first time buyers from getting onto the housing ladder.
The benefits of Shared Ownership are multiple and wide-ranging. It can help to bridge the gap between renting and full homeownership. Beyond the benefits to the individual, it can help to create more inclusive mixed-income communities and foster greater social mobility. Communities such as these are more likely to thrive, as they provide opportunities for upward mobility, encourage community cohesion and reduce the impact of any stigma that can be associated with social housing.
Shared Ownership represents an affordable, and potential win-win opportunity for the government. It deserves the same level of government-assisted marketing as benefited the now defunct Help to Buy scheme.
The significant advantage of Help to Buy was government-supported marketing: a dedicated, widely recognised brand with an effective information campaign and website which pointed would-be purchasers in the direction of suitable products. Help to Buy was instantly recognisable by consumers and had the authority and veracity that comes with being government-led.
A new marketing and communications strategy would help to raise awareness and provide guidance on the practicalities and advantages of Shared Ownership. People in Shared Ownership would be able to benefit from the enhanced stability, security and long-term financial growth that this can provide.
Helping first time buyers and others to get on to the property ladder is vital not only for the individuals involved but, as government has been quick to point out, central to the country’s social and financial prospects. Shared Ownership is a great product and there is great demand for it – but more needs to be done at a government level to fully realise this potential.
In related news:
Leave a Reply