Could shared ownership provide an alternative solution for Croydon’s housing needs?


By - Monday 3rd March, 2014

The much vaunted ‘Help to Buy’ scheme has drawn criticism and praise in equal measure, but does it suit all?


Saffron Square provides shared ownership options. Image courtesy of The House Group.

The crushing unaffordability of residential property across Greater London is having a significant impact on the levels of first time buyers. The average age of the first-time buyer is continually increasing, with sources estimating it to be around the 30 years old mark. Croydon is no different, with prices increasing at a rate of 18.8% in 2013, and the average house coming to the market at £331,896. Clearly, there is a problem which needs to be addressed to help many young Croydon residents to get on the property ladder, if they are to get on at all.

The government’s and, specifically, George Osborne’s solution to this problem nationwide is the introduction of the ‘Help To Buy’ scheme; put simply, the scheme allows for a deposit from as low as 5% to be put on a new build or existing home which costs up to £600,000. Whilst this has allowed many to achieve their first step on the property ladder, with soaring house prices across both the town and the country in general, many are still being priced out, and the 75% mortgage criteria is a struggle for many.

However, what many may neglect to consider is shared ownership. Shared ownership allows buyers to buy a share of a certain property – usually between 25% and 75%.

“5% of the full purchase price of a home in today’s market is still out of reach for many”

So how is this relevant to Croydon? One only needs to look at Saffron Square, a shining example of ‘New’ Croydon, with the residential tower on the site climbing every week. Many may expect purchasing an apartment within the complex unaffordable. However, with a provider such as Affinity Sutton, a £300,000 unit could be purchased with a deposit from as little as £3750 for a 25% share; through Help to Buy, this would cost £15,000.

Undoubtedly the debate over Help to Buy will rage on, with some experts suggesting it will add to London’s housing crisis by inflating prices, but there is evidence appearing that it may be reaping several benefits; the BBC suggests that renowned house-builder Barratt Developments have created 3,000 new jobs in the past year after increasing production of homes to meet demand for instance.

Yet shared ownership may provide the solution many on lower incomes need. Yvette Ruggins, sales director at Affinity Sutton, comments: “While Help to Buy has been invaluable in giving the property market a boost, 5% of the full purchase price of a home in today’s market is still out of reach for many, particularly in London, where prices are way above the national average. Shared ownership makes buying a home much more affordable with total outgoings usually significantly less than renting privately.”

Getting on the housing ladder has never been so tough, and whether Croydonians opt to use Help to Buy or shared ownership, there are at least options available to prospective buyers.

Tom Lickley

Tom Lickley

Contributing a variety of roles to the Citizen since early 2013, Tom now focuses upon regeneration, urbanism and real estate writing. He is a strategic communications consultant specialising in the real estate sector, and counts a number of the world's largest investment and fund management companies amongst his clients.

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  • Becca Taylor

    I’d absolutely love to have the shared ownership offer open to me – however, with competition high for houses and flats that come on the market, and criteria as tough as being on the council house list, there’s no chance at all for myself and my self-employed boyfriend to make our first step on the property ladder through this. 5% deposits in the help to buy scheme are certainly slightly more attainable, though still a far reach, as you’ve mentioned, given house prices in the London boroughs. That’s before you even start to apply for a mortgage as a sole trader. The Evening Standard recently reported that since Help to Buy was introduced, 10 times as many people had found themselves priced out of the property market than had been helped buy their first place with it (25,000 next to 250,000). Both schemes are half a start, but neither genuinely make improvements in the market or help young people get their first break on the property ladder.

    • Tom Lickley

      I think the pivotal point here is ‘self-employed’ – I sympathise with your situation, and not saying there shouldn’t be an alternative, but there has to be an understanding that with queues for housing so long, agents/developers/providers/banks need a guarantee that fees will be paid as it’s crucial to their business model too – they can’t have people defaulting on payments again, as we all know where that ends up.

      • Becca Taylor

        Yeah, of course, we understand that part. But there’s a lot of unfair mixed messages out there – it’s not uncommon to hear the government praise entrepreneurial spirit and encourage young people to set up their own businesses, but no one warns you that being a self-starter will actually royally screw you over when you try to rent or buy a property.

        Should also say I’m not rubbishing either scheme completely – we would never qualify for council housing/shared ownership in any case, so that’s not my main point. I’m just saying neither scheme actually solves the housing problem we have at the moment (and we really need to build more!)

        • Jane C

          Sorry, I may be being totally thick but what has being on the council housing register and qualifying for council housing have to do with buying a shared ownership property? I don’t live in London anymore so don’t know if it is different there now but here (Herts) you just need to earn under £60K a year, not already own a property and be able to afford to pay the mortgage, rent and service charge.
          I bought a shared ownership property in Wandsworth about 10 years ago and I had to register my interest for affordable housing but it wasn’t the same as qualifying for council housing.
          Has it all changed now?

          • Becca Taylor

            The qualifications we’ve seen near us include what you’ve listed as well as similar quals to council housing, which means I’d personally be at the bottom of the list.

  • Anne Giles

    Sounds like an excellent idea.

  • Ian Marvin

    I attempted to participate in a shared ownership scheme way back in 1985, it was operated by Notting Hill Housing Trust who pioneered it in the UK. The purchase price limit was £40k then and as soon as it became available the price of one bedroom flats increased above that with only studio flats coming under the ceiling. This was considered locally to be a direct consequence of the scheme, an early example of assisted purchase schemes distorting the market to effectively neutralise any potential benefits. The main cause of the problems is demand exceeding supply, increasing funding does not help, we need more supply.