In last year’s Autumn Statement, the government promised to make shared ownership more attractive to potential owners, investors and lenders and last month, the Department for Communities and Local Government consulted jointly with the Homes & Community Agency on proposals to speed up the resale of shared ownership properties.

The problem

Currently, shared homeowners of properties that have been developed with a grant from the government's Affordable Housing Programme (excluding London) cannot put their properties on the open market until they have first written to their housing provider (usually a housing association) requesting consent. The housing association has the right to buy back the interest or nominate another buyer.

These rights endure for 21 years after a shared owner has bought the property outright, making it difficult to achieve a quick sale. Having decided to sell, a shared owner may have to wait up to eight weeks for its housing association to reach a decision. According to the government, housing associations do not use their pre-emption rights as often as expected and yet lenders view the right as an incumbrance on the title and are wary about lending on shared ownership properties. This leads to a restricted lending market, puts off potential investors and creates further delays for a would-be seller.


Proposals for reform include –

  • Removing pre-emption rights from the standard model clauses for future leases and achieving the same result in existing leases, through a lease variation on re-assignment;
  • Keeping the rights but reducing housing associations' response time to four weeks;
  • Keeping the rights but allowing shared owners to put their homes onto the open market while the housing association considers nominating a new householder;
  • Combinations of the above.

Joint report by Orbit and CIH

Last month also saw the launch of a report summary by the Orbit Group and the Chartered Institute of Housing (CIH). The report believes that, with the right policy interventions, there is potential to increase shared ownership from 15,000 homes per year to at least 30,000 over the life of the next parliament. That’s around 13% of the 240,000 new homes England needs each year.

But, says the report, shared ownership needs to be rebranded and simplified. It highlights a number of problems that undermine lender and investor confidence, and makes a number of recommendations, including finding a consistent way of collecting more reliable data about staircasing activity, arrears levels, and levels of default.