Spotlight: 

Shared Ownership

Shared Ownership
Shared Ownership

13 April 2016, by Chris Buckle

The Government has allocated an unprecedented £4.1bn to the delivery of shared ownership, opening up new opportunities for development and investment

Summary

■ Private developers, as well as housing associations, will be able to bid for the grant funding.

■ For housebuilders, increasing scale and diversity will create new opportunities to maximise capital receipts from S106 obligations.

 

■ The expansion of shared ownership will open up new opportunities to invest in the income stream from unsold equity shares.

■ Demand for shared ownership is potentially substantial and is likely to be greatest where house prices are least affordable, albeit that it is difficult to deliver into the very highest value markets.

■ Shared ownership will need to compete with other assisted home ownership programmes, including Starter Homes and Help to Buy. In order to differentiate it from the other options, the greatest demand is likely to be for low initial share sales.

■ Expansion of delivery should increase interest from mortgage lenders, creating greater competition and bringing interest rates closer to those for full house purchase.

■ Imperfect information and limited opportunities mean that the investment market in the unsold equity shares is currently immature.

■ In order to maximise these opportunities, better information is needed on staircasing and delinquency rates so that the real value of the asset can be properly assessed.

■ Better information would also help lenders increase their maximum gearing ratios against shared ownership assets, opening up greater financial capacity for housing associations to deploy in building more homes.

Articles from Spotlight: Shared Ownership – April 2016

Shared Ownership Opportunities

The drive for home ownership is opening up new opportunities for shared ownership development and investment

What Is Shared Ownership?

This scheme allows you to buy a share of your home and pay rent on the remaining amount

Heylo Housing

13 April 2016

Heylo Housing

The shared ownership deal between Heylo Housing and Bellway is the first of its kind

 
 

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Key contacts

Chris Buckle

Chris Buckle

Director
Residential Research

Savills Margaret Street

+44 (0) 207 016 3881

 

Nick Gregori

Nick Gregori

Associate
Residential Research

Savills Margaret Street

+44 (0) 207 409 5907

 

Mervyn Jones

Mervyn Jones

Director
Housing Division

Savills Margaret Street

+44 (0) 20 7409 5992

 

Piers de Winton MRICS

Piers de Winton MRICS

Director
Residential Capital Markets

Savills Margaret Street

+44 (0) 20 7016 3816