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Shared ownership plans flawed

4 July, 2008

Commenting on the plans, Vaughan said: ”The new initiative to provide up to £270 million to build shared ownership homes is unfortunately flawed. Yes its fine providing the extra money to buy homes – the intention being that there will be more opportunities for housing associations to purchase developments and land which can in turn be made affordably available to first-time buyers and key workers. However housing associations have to think carefully about buying these properties. It could mean that if property prices continue to fall, housing associations could end up being lumbered with properties and land that developers had previously struggled to offload. Ultimately there is a reason developers are divesting themselves of these sites, and it’s certainly not for the greater good of people that can’t get on the property ladder.

“Where we really do need to feel the government’s presence (from either a private developer or Registered Social Landlord perspective) is that there’s a desperate shortage of mortgage products on the market. One factor driving the property slow-down is not the fact that people don’t want to buy property, it is that our customers are unable to secure mortgages. More proactivity from the government in reaching out to and engaging with the Council of Mortgage Lenders would be welcome, which to a certain extent they have already attempted, but there is no evidence that this has resulted in an increase in the availability of products for people that want to own a home of their own – if anything there has been a significant reduction in choice for buyers.”