Housing Minister Acknowledges London's Shared Ownership Challenges
Housing Minister Matthew Pennycook has publicly admitted that shared ownership properties present "particular" difficulties for London residents, highlighting regional disparities in the consumer experience of this government-backed affordable housing scheme.
The shared ownership program allows households who cannot afford full market prices to purchase a share of a property while paying regulated rent on the remainder. To qualify, buyers must have a gross household income under £90,000 annually and not currently own a home.
London's Unique Housing Pressures
During testimony before the Commons Housing, Communities and Local Government Committee, Pennycook explained that while shared ownership functions effectively in some regions, it creates more problematic situations in London. "I think it's a particular issue for London members and I face this in my own constituency," stated the MP for Greenwich and Woolwich.
London's housing landscape presents unique challenges because the capital contains the highest proportion of leasehold properties in the country. This structural reality leaves shared ownership residents vulnerable to escalating service charges and, in some cases, ground rent payments that can undermine affordability over time.
The Staircasing Dilemma
Minister Pennycook identified several key affordability pressures facing shared owners:
- High staircasing and resale fees
- Increasing service charges
- Complex and costly staircasing processes
Staircasing refers to the process where owners purchase additional shares to increase their equity and reduce monthly rent payments. However, data reveals significant challenges: a 2023 report from the Shared Ownership Resources platform showed that fewer than 2,000 households in London managed to staircase to 100% ownership, which would grant them full property ownership.
"That is why we are reforming the shared ownership model to provide greater flexibility, including smaller staircasing increments," Pennycook explained. "We are thinking very carefully about what more can be done to improve the staircasing process and the wider customer experience."
Political Responses and Investigations
Zoë Garbett, Chair of the London Assembly Housing Committee, emphasized the urgency of addressing these issues: "Ensuring Londoners have access to high quality, affordable housing must be a key priority."
The Committee conducted an investigation into leasehold challenges in London, examining service charges for shared ownership homes specifically. Garbett noted: "Thousands of Londoners are living in shared ownership homes funded by the Mayor. However, many shared owners told us how current practice on service charges can undermine the very point of shared ownership – of being an affordable housing option."
She further explained the disproportionate impact on lower-income shared owners: "Since the income range of those who qualify for shared ownership is wide, those at the lower end of this range experience the impact of these increases more acutely."
Statistical Context and Policy Shifts
London currently contains approximately 60,000 shared ownership properties, compared to 190,000 in other UK regions. During the 2016-2023 Affordable Home Programme, City Hall initiated 42,070 shared ownership homes.
However, Mayor Sadiq Khan has acknowledged that shared ownership "will not be suitable for everyone" in the capital. City Hall has subsequently shifted its priority toward social rent options, recognizing the limitations of the current shared ownership model for addressing London's housing affordability crisis.
Assembly Members have previously warned that shared ownership homes could become inaccessible for many Londoners due to high mortgage payments linked to interest rates and unregulated service charges. Last year, the London Assembly Housing Committee specifically recommended that the Mayor include "designing down service charges" in his updated London Plan.
The ongoing debate highlights the tension between shared ownership as a theoretical pathway to homeownership and the practical financial burdens that can make this housing option increasingly unaffordable for London residents over time.
