Shared ownership has always been a bridge between renting and full ownership: a model designed to help households who earn too much for social rent yet too little to buy on the open market. But in many parts of the country especially the south east, Shared Ownership is becoming unaffordable to many.
At a panel I chaired at UKREiiF last year, we discussed a very pressing question: should Shared Ownership thresholds be increased in higher-value areas to reduce the number of people unable to buy either as Shared Ownership or on the open market? The debate was lively because the fact it that the current system is struggling to keep pace with the market that it was designed to serve.
The affordability squeeze
The current income thresholds – £90,000 in London and £80,000 elsewhere – have remained unchanged while house prices (and to a lesser extent), salaries, have risen. In the capital, a modest two-bed apartment might now cost £600,000. Even purchasing a 25 per cent share demands a deposit and mortgage well beyond the reach of most would-be buyers, particularly those already spending a significant portion of their income on rent.
In theory, Shared Ownership should offer a lifeline. In practice, it is starting to shut people out. There is now a growing group of households earning just above the threshold who cannot buy outright yet no longer qualify for Shared Ownership. They fall into the “missing middle” and typically it’s not just key workers who fall into this category, but professionals earning as much as £100,000.
Arguments for and against
There are two competing views. The first, which I share, is that thresholds should rise in line with inflation and, ideally, reflect regional house prices. The opposing argument is that higher thresholds would open the scheme to so many more people that it could divert limited supply away from those in greater need.
Both positions have merit, but we have to recognise the realities of today’s housing market. In London, we rarely sell more than a 25 per cent share because affordability limits demand. Registered Providers depend on an average first-share sale closer to 35 per cent to recover costs, which makes the numbers difficult to balance without grant funding. That is why relatively few for-profit providers operate in the capital – and why even those that do often rely on public subsidy.
Why regional variation makes sense
Regional variation is often dismissed as too complicated, yet a single national threshold ignores the gulf between markets. In Hartlepool, a four-bed home might sell for £220,000. In Bournemouth, the same property costs £400,000 – yet both fall under the same £80,000 limit.
A more logical approach would be to link eligibility to property values, perhaps setting thresholds as a proportion of local prices. This would maintain fairness and ensure support reaches those who genuinely need it, wherever they live.
A wider crisis in delivery
This discussion cannot be separated from the wider slowdown in housing delivery. London in particular is facing a deepening crisis. Completions have fallen to just over 33,000 a year – less than half the government’s target – and planning approvals are at their lowest since records began. Rising build costs, complex regulations and stagnant sale prices have created a perfect storm.
Developers are delaying or shelving projects, while Registered Providers are scaling back Section 106 acquisitions. With fewer affordable homes being built, the pressure on Shared Ownership to deliver access to homeownership is only intensifying.
At the same time, demand for affordable routes into ownership is surging. The end of Help to Buy removed a major source of support for first-time buyers. Shared ownership has filled some of that gap, but not enough. In 2018-19 more than 16,000 Shared Ownership homes were built; last year the number had dropped to barely 3,000.
The government’s blind spot
One reason is that Shared Ownership has quietly slipped down the policy agenda. The model barely features in planning policy or the NPPF. It attracts none of the visibility or branding that powered Help to Buy. That lack of recognition weakens awareness, dampens confidence and reduces the appetite of housing associations to deliver.
I see this neglect a very short-sighted. Shared ownership does not require the same level of public subsidy as social rent, but it supports the same policy goals: providing stability, mobility and a pathway to full ownership. It helps households build equity, reduces pressure on the private rented sector and encourages mixed-tenure communities.
Looking to the future
If we want Shared Ownership to remain relevant, three actions are essential.
First, thresholds must rise to reflect inflation and regional realities. Without that adjustment, the model will fail in the very markets where it is most needed.
Second, government should restore visibility and confidence in Shared Ownership – through clear policy statements, funding support and public communication. Help to Buy succeeded not only because of its subsidy but because it was well-understood. Shared ownership deserves the same clarity.
Third, planning and funding frameworks must give housing associations and for-profit providers the capacity to deliver. That could mean grant flexibility, price-banded thresholds or incentives for s106 delivery.
Keeping the ladder within reach
Shared ownership is not a silver bullet: it will not solve the housing crisis. But for thousands of people, it is the only viable step onto the ladder. Unless thresholds evolve with the market, that step will disappear.
At SOWN, we see daily evidence of the demand and potential for Shared Ownership – from young professionals in London to families throughout the country. With modest policy reform and renewed commitment, Shared Ownership could continue to offer hope and mobility for a generation otherwise locked out of homeownership.
