Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 10
10
Accepted in Part
Paragraph: 68
Proportion of shared ownership housing stock lost to open market remains unclear.
Conclusion
It is currently unclear what proportion of shared ownership housing stock is being lost to the open market. This makes it impossible to judge what impact sales of shared ownership homes to the open market are having on the overall supply of affordable housing in the UK. We welcome the data provided to us by Baroness Penn which shows the number of 100% staircasing sales for the previous three years, as well as the introduction of a question to the CORE platform on whether a staircasing transaction is part of a ‘back-to-back’ sale. This should help improve our understanding of the implications of shared ownership on affordable housing stock, although there is still no specific plan for how the Government will replace those homes which are sold on to the open market.
Government Response Summary
The government commits to reviewing all data on staircasing transactions, including back-to-back sales, and exploring further data improvement. However, it explicitly states it does not believe a plan to replace shared ownership homes lost to the open market is necessary, citing existing grant recycling requirements.
Paragraph Reference:
68
Government Response
Accepted in Part
HM Government
Accepted in Part
25. We will review all data collected through CORE on staircasing transactions, including back-to-back staircasing transactions, once the reporting year for 2023-24 has concluded. We will also continue to explore other options to improve our information on rates of staircasing. 26. Once final (100%) staircasing has been achieved, the property is no longer considered to be a shared ownership home. This applies regardless of whether the shared owner has engaged in back-to-back staircasing to sell on the open market, or whether the shared owner has engaged in final staircasing and continues to occupy the home. As noted by the Committee, the Government publishes data on the number of final staircasing transactions each year, and these can be compared against publicly available data on the number of new shared ownership homes delivered annually. 27. As highlighted in Baroness Penn’s letter to the Committee of 24 January 2024, these datasets show that the number of new shared ownership homes delivered has exceeded the number of existing shared ownership homes where final staircasing has been achieved in recent years. This has resulted in an increase to the number of low-cost home ownership homes (of which shared ownership is by far the largest component) owned by private registered providers. 28. The Government has also put provisions in place to ensure that where staircasing occurs, including final staircasing, it can be used to generate further benefits. For example, when a shared owner engages in staircasing, registered providers are required to ‘recycle’ a proportionate amount of the original grant funding that was used to develop or acquire the home. This grant can then be used for a series of permitted purposes, including the delivery of new shared ownership homes. 29. Based on the operation of the scheme, current levels of delivery, and existing recycling requirements, the Government does not believe the development and publication of a plan on how to replace shared ownerships homes where final staircasing has been achieved to be necessary.