Housing association chiefs defend shared ownership and call for more government grant

Housing association chiefs defend shared ownership and call for more government grant

Shared ownership is the housing tenure everyone loves to hate – except, it seems, for London home-seekers who are increasingly taking up the option, which allows them to buy a portion of their home and rent the rest, and providers of such housing, as it helps them to cross-subsidise homes for social rent.

That was the message from senior London housing association figures interrogated by the London Assembly housing committee about what they are building and whether, as some commentators have suggested, they are straying too far from their original charitable purposes.

The largest London associations, collectively the G15, are big business. They house one in 10 Londoners, own more homes than all the 32 boroughs put together, are building a quarter of all new homes in the capital, and get the lion’s share of City Hall housing funding support – 91 per cent of £1.7 billion announced last year.

In the spotlight were chief executives Helen Evans (Network Homes), David Montague (L&Q), Geeta Nanda (Metropolitan) and Rod Cahill (Catalyst), all of them members of the G15, which last year completed just under 100,000 new dwellings in the capital. G15 figures reveal that 30 per cent of those homes are for shared ownership, alongside 28 per cent for open market sale or rent. It all came down to finance, the CEOs said.

“If we can’t sell homes we have to reduce the numbers of homes we build,” Evans told the committee, while Cahill confirmed that with a social housing unit costing some £300,000 to produce, including land costs, and grant at £70,000 a unit, substantial subsidy was required, and this was generated through selling homes at full market rates market and also from shared ownership. “The amount of grant just isn’t enough,” he said. “If the government wants us to do more, there has to be some reality about the funding required.”

Cross-subsidy alone would not produce a large amount of social housing, he said. “There needs to be an understanding of what needs to happen to fund a significant programme of social housing. We are prepared to put our cross-subsidy in, but the amount of grant available is not credible.” Local authorities starting their own development were in the same position, he added. “They are understanding that they are faced with the same economics.”

Montague added that L&Q’s 20,000 home development programme included 8,000 market homes – required in order to deliver 12,000 affordable homes of different kinds. “If there isn’t enough grant, we won’t build enough homes,” he said.

The panellists also put up a robust defence of shared ownership, both as a means to generate cross-subsidy for social rented homes and as a popular product in its own right, helping to meet housing need across the income range. “Its always been a terrific solution for people who don’t qualify for social housing but can’t afford to buy privately,” said Cahill.

They refuted suggestions that, via expansion, merger and a focus on development, they had moved away from their roots. “We are as passionate about our charitable purposes now as we were when we were founded in 1969,” said Montague.

Further areas of concern included repairs and maintenance performance, resident engagement and accountability, as well as the continuing growth of the sector, as key GLA partners who are vital to Sadiq Khan’s housing plans.

With GLA funding continuing to flow alongside an increased focus on affordability, the spotlight is set to remain on a sector which remains, in committee chair Sian Berry’s words, “so much the game in town”. The committee session can be viewed in full here.

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