Is there a bigger indictment of the housing crises than Shared Ownership?
On the surface it’s something that’s supposed to help first time buyers yet in reality is another prop keeping prices way above where they would be without intervention.
As average prices have raced away from average wages over the past two decades, and governments of all types interfere in the “market” to prop up asset prices the shared ownership wheeze has grown ever larger. It started at a 75% share, then 50% and now 25% is common. Does it end up at 5%? A measly one per cent? Don’t laugh – the Tories have been mooting something along those lines. And you can add rent onto that.
For most of the past century someone earning the average UK wage would be able to buy a home at around five times average earnings. That made home ownership -true home ownership – a feasible aspiration for many. Markets would rise and fall but this was the average and gave most the hope of buying an entire share of a home. But that was before housing developers became all powerful and political influence grew hugely.
Fast forward to this brave new world. The “market” isn’t a market. Government – including the Tories who claim to espouse the free market – constantly intervene in an attempt to keep rices high and rising. Housing rises to nine, ten, eleven times average wages. In much of London the average home is now 15 times average wages of £30,000.
And because of that the vast majority of people can’t buy outright. Even those in above-average wage professions often have little chance. Without parental support it’s likely to be no chance. Now, prices could be allowed to fall to normal levels as seen over the past century or being able to buy ever diminishing shares is offered. The latter is chosen.
Instead of letting the market correct itself to give people on their own two feet the chance to buy an entire home governments get ever more creative.
It’s a mass transfer of wealth from the average citizen to powerful developers who retain much of the ownership. Add in rent on the remaining share, ground rent and service charges and some are doing well. And hope your cladding isn’t flammable.
It’s a massive charade. And all wrapped up in patronising drivel about “helping people”. It’s not. It’s helping those who own the land and build on it.
Keep an eye out for ever lower percentages of “ownership” if you can call 25% or less that. In 50 years will be end up with many people “owning” single-digit percentages of homes?