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Published: 27 February 2017 | Author: Caroline Offord

Shared ownership remains high on the housing policy agenda. With this in mind, at the CML we have begun tentatively exploring how we can provide more information about the sector. We can now identify within our database more than 60,000 shared ownership mortgages advanced since 2006, and around 40,000 of these are still live on lenders' books.

By way of context, our dataset is still in its early stages of development, but we are able to make some initial observations about the profile of shared ownership borrowers and mortgages. The majority of borrowers opting for shared ownership are first-time buyers, and we have focused on these in this analysis.

Some key early findings

  • First-time buyers in southern England are more likely to opt for shared ownership than those in other parts of the country. This is perhaps not surprising given the heightened affordability pressures in this region.
  • Shared ownership borrowers stretch their purchasing power and buy higher valued properties than other first-time buyers, even allowing for a different regional mix. This effect was also noted in our research report Government Schemes: Accident or design?
  • Like other first-time buyers, shared ownership borrowers are increasingly opting for repayment terms of longer than 25 years. In 2016, six out of 10 shared ownership first-time buyers chose to repay over a term of longer than 25 years.
  • Fixed-rate mortgages are popular among shared ownership borrowers, and more so than for first-time buyers overall. Of shared ownership mortgages that are still live on lenders' books, just over half are still on a fixed rate, while others will have reverted to lenders’ variable rates.

Our report Shared-ownership: Ugly sister or Cinderella? identified some key gaps in information about shared ownership and made recommendations for improving our knowledge of the sector. Around 200,000 households in the UK currently live in shared ownership properties – a relatively small number compared to those in full owner-occupation, but still a significant number of borrowers.

Next steps

The recent report from the Chartered Institute of Housing, Shared Ownership 2.1, noted that progress has been made, but there is still much to do to make shared ownership a mainstream tenure. Meanwhile, in its recent housing white paper, the government re-asserted that it wanted to attract more institutional investment into the provision of shared ownership.

It would be useful to compare the performance of shared ownership mortgages with the market overall. This will only be possible with additional information about the shares of properties initially bought, ideally by bringing together our data with other sources such as CORE – the government source based on the continuous recording of lettings and sales in social housing in England. 

In order to expand our dataset so that we are able to offer more detailed insights over time into the profile and performance of shared ownership mortgages, we will need to collect more data from lenders. We have summarised a series of measures to promote shared ownership and are continuing to work with the National Housing Group (NHG) to collate additional information about shared ownership borrowers.