This report was commissioned by Tower Homes and Metropolitan Home Ownership, two of the largest providers of Low Cost Home Ownership in the London area. It involved a survey of clients who purchased on a shared ownership basis over the past twelve months and a second survey of those who became shared owners between three and four years ago. The research looked at the longer-term affordability and sustainability of Low Cost Home Ownership. Affordability is explored both objectively by considering monthly outgoings incurred related to income, and subjectively as revealed in the surveys and interviews with clients.
- The research shows that the vast majority of MHO and Tower shared ownership clients are happy with their housing and are satisfied with the service they receive from MHO and Tower Homes. This satisfaction is sustained well after the initial purchase process as it is also found amongst households who moved in 3 to 4 years ago.
- MHO and Tower’s shared ownership households are paying an average of around 30% of their gross household income on housing costs. Most are managing to meet their housing costs without difficulty even when their circumstances have changed.
- Substantial increases in housing costs would not be manageable to many households. This suggests that MHO and Tower Homes are successful in promoting sustainable levels of borrowing amongst their clients, and that higher levels than are currently permitted would place many households at risk of future difficulties.
- Where difficulties with repayments do exist, this is in most cases due to changes in personal circumstances, rather than to households taking on too much debt initially. The flexible tenure option of staircasing down provides a valuable safety net for the very small number of households who might otherwise face repossession.
- The research demonstrates that shared ownership offers accessibility to home ownership for a wide range of households on lower incomes, thus contributing to social equity and expanding the asset base. Careful vetting ensures that people are not over-stretched but can participate in some of the equity gains that accrue to owner occupation.