Affordable homes help modest earners onto property ladder

Over 44% of households buying shared ownership homes have incomes of under £25,000 and nearly a quarter have incomes of under £20,000, according to new data released today.

The figures, which come from a new research report by a group of 21 housing associations, show that just 13% of affordable homebuyers have an income of £40,000 of more. Less than 4% earn £50,000 or more.

Facts & Figures are based on 2009 statistics produced by the Homes and Communities Agency. The median income for all households buying a shared ownership home in 2008/09 was £26,000.

The new research also reveals that the average age of a new shared owner is 32, compared to 37 for first time buyers in the open market who do not have financial assistance from parents or relatives.

Government funding support for shared ownership is likely to be helping those people who do not have parents or other relatives able to offer support to get onto the housing ladder.

Furthermore, the repossession rate for shared owners is actually slightly lower than for homebuyers in the open market and buy-to-let owners, showing shared ownership is no more risky for lenders than any other mortgage lending.

Marilyn DiCara, chair of the Promoting Shared Ownership group of housing associations which produced the report, said "These figures show that shared ownership is able to support house buying amongst people even on relatively low incomes, contrary to what some other recent research reports have suggested. What's more, this is achieved without any increase in risk of repossession, which indicates that the shared ownership choice is sustainable for lower income purchasers.

"Clearly, housing association providers are targeting shared ownership sales effectively on the demand groups government is aiming funding support towards. Our careful financial assessments and comprehensive, early debt advice also deliver real benefits in terms of sustaining ownership when circumstances change.

"Shared ownership is highly cost effective for government to fund. It costs less in grant per new home than other forms of affordable housing and it meets real housing needs for people who earn modest sums, but have no hope of obtaining social rented homes."

The report details 22 facts about shared ownership which illustrate its importance to the housing market, its wider social and economic value, and its ability to support the Government's plans to promote an age of aspiration in housing. Research tables show the impact of insufficient supply of new homes on housing affordability and housing waiting lists across all English regions.

The report calls on the government to maintain shared ownership funding at current proportionate levels when the Comprehensive Spending Review and next National Affordable Housing Programme are announced.