White paper says model would increase delivery and save money for government
Vistry has published a white paper calling for a new form of shared ownership backed by private capital rather than grant funding.
Shared ownership is a housing tenure that is designed to help people get on the property ladder even if they cannot afford the full deposit or mortgage payments for a home that meets their needs.
Typically people buy a share of between 10% and 75% of a home’s full market value and pay rent and service charges to a social landlord for the remaining share, the initial acquisition of which is typically supported by government grant.
The white paper drafted by the partnerships-led housebuilder makes the case for what it calls “choice-led” shared ownership.
The model has a minimum initial share of 60% purchased via a conventional mortgag, with rent of 3.5% payable on the remaining 40% which would be supported by institutional capital, a lender-provided debt tranche and a proposed 1% National Housing Bank equity contribution.
The buyer would then be able to increase their ownership share over time through staircasing, potentially reaching 100% ownership.
Under this model, the portion rent paid by the shared ownership buyer would be an income stream for institutional capital, rather than a social landlord.
Vistry claims the model would enable first-time buyers to purchase a qualifying new build home of their choice with only a small amount of public subsidy. It argues that the model would appeal to the “squeezed middle” of aspiring homeowners.
The white paper estimates that the proposition could support up to 150,000 homes over a five-year period and reduce the grant requirement by up to £10.5bn compared with an equivalent number of homes delivered through traditional grant-funded shared ownership.
The report was developed in consultation with more than 35 organisations, including registered providers, investors, government representatives and sector bodies.
“This report demonstrates that choice-led shared ownership is implementable and scalable, offering a practical route to more accessibility and affordability for first-time buyers,” said Stephen Teagle, chief executive for partnerships at Vistry.
“It also has the potential to make a significant contribution to GDP and housing delivery, with minimal reliance on public subsidy.”
“It is clear that momentum is building behind this concept. Government and the housing and investment sectors now have an opportunity to turn that momentum into action, supporting economic growth while helping more first-time buyers access to high-quality new homes.”
Teagle has previously advocated for other alternative forms of shared ownership, calling on the government to introduce a Do-It-Yourself Shared Ownership scheme for new builds ahead of the 2025 budget.
The paper suggests the government establish a taskforce to create an operational model for choice-led shared ownership that is ready for launch, with a clear pipeline of opportunities for investors.
The report received support from The Housing Forum and Pocket Living, among others.
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