Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 3
3
Rejected
Paragraph: 38
Collect and publish evidence to assess Rent to Buy and shared ownership viability and staircasing trends.
Recommendation
Rent to Buy may represent a better value for money product than shared ownership, but there is insufficient evidence to come to a firm judgement on this at present. Both Rent to Buy and Shared Ownership as affordable home ownership schemes need to be better understood in terms of their affordability and how far they enable 100% homeownership. The Government must as a matter of urgency begin collecting evidence, in liaison with mortgage lenders and providers, in order to assess the viability and affordability of Rent to Buy relative to shared ownership. It must also collect and publish data around staircasing trends over time within shared ownership. These data should then inform the proportion of shared ownership and Rent to Buy homes allocated within the next iteration of the Affordable Homes Programme.
Government Response Summary
The government dismisses the urgent assessment of Rent to Buy vs. shared ownership, stating their similarity under AHP and inappropriateness for private schemes. While it has adjusted data collection for staircasing and will review publishing it, it rejects using this data to directly inform the proportion of homes in the next Affordable Homes Programme.
Paragraph Reference:
38
Government Response
Rejected
HM Government
Rejected
9. As outlined to the Committee in Baroness Penn’s letter of 24 January 2024, almost all Rent to Buy homes funded through the AHP are purchased on a shared ownership basis, and exclusively so in London (the Greater London Authority’s version of Rent to Buy is known as the ‘London Living Rent’). Baroness Penn’s letter also explained that as forms of ‘low-cost home ownership’, the benefit-cost ratios (the method by which value for money is established) for Rent to Buy and shared ownership are extremely similar. There are of course different forms of Rent to Buy available on the open market. As these schemes are privately funded and operated, it would not be appropriate for the Government to assess their functionality, efficiency, and/or value for money. 10. We have made recent adjustments to our continuous recording of social housing sales (CORE) dataset to improve our data collection on staircasing. We also publish information on rates of final staircasing, derived from the Regulator of Social Housing’s (the Regulator) Statistical Data Return and Local Authority Housing Statistics Data Return. 11. The Government will continue to review how it can improve its data collection on rates of staircasing, with a view to publishing this information in due course. In the interim, we urge all private registered providers to review their CORE data submission processes to ensure that they are submitting data for all shared ownership sales, including staircasing sales, and that they are doing so accurately. 12. The Committee recommends that staircasing data should be used to inform the proportion of shared ownership and Rent to Buy homes in the next iteration of the AHP. To clarify, the Government sets overall targets for the delivery of specific forms of affordable housing through the Programme. It is then for registered providers to decide on the exact makeup of their bids for grant funding, including the types and number of affordable homes they wish to deliver, based on their business plans and expertise, and the need to support local authorities in meeting local housing needs.