Gaps in data on shared ownership means government cannot fully show if it is working for everyone, says spending watchdog

Shared ownership is a government backed affordable housing model, with the objective to offer an affordable route into home ownership for buyers who cannot afford to purchase a home on the open market.

There are currently more than 250,000 households in shared ownership homes in England, up from 202,000 in 2020.

The model enables buyers to purchase a share of the property – typically between 10% and 75% – and pay rent on the remaining share to a housing provider. Over time, shared owners can buy more of a share of the property through a process known as ‘staircasing’.

However, in a report published this week the NAO warned that complexities around service charges and the ‘staircasing’ model mean many who take up the scheme “don’t fully understand the longer-term financial risks”.  

For example, shared owners reported concerns with transaction costs that apply each time they want to buy a bigger portion of their property.

Meanwhile, the NAO warned that the Government lacks “essential data” to help assess whether shared ownership remains an affordable and well-managed scheme over time.

According to the report, since the closure of the ‘Help to Buy’ scheme and the introduction of new restrictions on ‘Right to Buy’, shared ownership is now the largest government supported home ownership scheme for new owners.  

The Government collects and publishes data from private registered providers and local authorities about affordable housing and shared ownership annually through the CORE (Continuous Recording of Lettings and Sales in Social Housing in England) dataset, as well as having access to other data sets that capture some aspects of shared ownership property sales and staircasing.

However, the NAO report claims that CORE does not have a full response rate from local authorities and private registered housing providers, and MHCLG is “unable to enforce collection”.

The report notes that more and better data would enable the Government to determine whether the model is affordable over time, and to assess risks across the shared ownership lifecycle.

Gareth Davies, head of the NAO said: “Shared ownership remains an important route into home ownership, but it is complex, and weaknesses in information, affordability, data quality and redress mean that government does not yet have a full understanding of how the model works for consumers.”

The Ministry of Housing, Communities and Local Government has been approached for comment.

Lottie Winson