Helping to drive a better shared ownership offer for consumers

People across England who aspire to own a property are finding access to homeownership increasingly difficult to achieve owing to the shortage of affordable housing, coupled with higher interest rates and rising costs of living. 

Our belief is that shared ownership has yet to fulfil its potential as an important product, offering many households a positive alternative to full ownership or renting.

While all would acknowledge the benefits of shared ownership, consumers entering this tenure can face pain points throughout their experience. These often relate to: 

• Challenges in building awareness and clear understanding of shared ownership.
• Not having the full picture at the outset on future costs and obligations associated with being a shared owner.
• Getting the right support to increase the share they own in their home or to move on.

There is an opportunity to improve on all three fronts. This is an opportune moment with many parallel initiatives that lend support – for example, emerging consumer-focused obligations such as the FCA Consumer Duty and new regulation from the Regulator of Social Housing.

Industry is best placed to lead the way. The shared ownership consumer experience is shaped by a combination of services and products provided by a range of organisations. Shared ownership sits across different regulatory areas, meaning that existing consumer-focused initiatives do not offer a clear mechanism to address the pain points and drive a more comprehensive and better consumer experience. That fragmentation is the reason there is so much potential in a cross-industry response to these challenges.

To develop a response to these challenges, we have been working with Peter Williams, a departmental fellow at the Department of Land Economy at the University of Cambridge and an established expert on housing policy and the housing market, Lloyds Banking Group, and an expert group drawn from across the industry. We have carried out extensive research, alongside engagement with stakeholders including housing associations, mortgage lenders, industry bodies, intermediaries and mortgage advisors.

In early 2023, with support from Social Finance and based on our findings, the expert group set out in a discussion paper a set of action-oriented proposals which in their view would lead to a better experience of shared ownership and through that an expanded shared ownership market. The main proposal was to define and deliver an industry-led framework in shared ownership, one that provides the foundation for growth of the shared ownership market, by improving consumer experience of the tenure, increasing demand, and stimulating further private and government investment in the tenure.

We have been inviting feedback on this discussion paper from a cross-industry set of stakeholders, as well as sharing our progress and inviting feedback at various industry forums. Over 30 organisations have provided written feedback, and hundreds have contributed verbally at industry forums. Overall, there was broad support for our proposals as well as lots of helpful input on specifics we are now addressing. You can read more about the feedback we received in our update on responses to discussion paper on shared ownership.

Based on this feedback, we are now proposing a voluntary, industry-led Code of Good Practice, housed in an independent body. This would be backed by a set of resources that industry participants can use. The Code is based around two primary consumer-focused aims:

• To make it easier to have a clear and fair understanding of shared ownership.
• Supporting consumers on their journey once they become shared owners.

Our current priorities are: securing cross-industry funding for the initiative; bringing in key people; and planning the incubation of the independent body, which we are calling the Interim Shared Ownership Council (ISOC).