Ed Rooney, a director in the development team at Savills in Manchester comments on shared ownership following yesterday’s Autumn Statement:
Plans to deliver 135,000 new shared ownership homes will enable more people to get on to the housing ladder and help open up the property market to renters on median income who struggle to save for a deposit.
Enabling more people to buy could act as an incentive to increase the rate of housebuilding. Our analysis shows that the rate of housebuilding tracks (in a relationship of ca 1:10) the number of property transactions which have been held back by a constrained mortgage market and high deposit requirements. Shared ownership schemes provide another route onto the housing ladder, but will still require buyers to have a steady income and credit history and access to a modest deposit. Nonetheless, this initiative will narrow the gap between those with access to the bank of mum & dad in raising a deposit for market purchase and those without.
The announcements in the Autumn Statement have potential to open up new markets to housebuilders, though the extent to which it achieves this is depends on how it is viewed relative to other forms of housing delivery
However, it will not help households on the lowest incomes.
