Jonathan Corris and Jonathan Jarvis, Partners, discuss how the market could finally be warming to the benefits of shared ownership.
Following Shared Ownership Week last month (19-25 September), Jonathan Corris, partner in our Real Estate & Projects team, predicts the market could finally be warming to its benefits: “Shared ownership has had more than its fair share of detractors, regarded by many as an outlier from the core housing stock. Yet it’s been part of the industry for 40 years and isn’t going away. Not only is the volume of shared ownership transactions increasing year on year we are also seeing an ever growing expansion across the country into new local markets.”
Jonathan Jarvis, partner in our Banking, Governance and Corporate team, also comments that we are seeing RPs looking to undertake a step change in the approach to managing their retained interest within shared ownership properties. In particular clients are look to move shared ownership properties into separate corporate vehicles, either through subsidiary group members or via strategic partnerships with third parties including the growth of the for profit market. It really does seem like the tide could be turning as more and more providers realise it makes good business sense to extrapolate these assets from the core business and share the risk through a joint venture.
Of course, private developers have a key role to play if shared ownership is to become widely adopted. In a bid to maximise profits, there is often a tendency to limit affordable homes on larger schemes, but more strategic partnerships could help shift this trend. By working in joint ventures with housing associations from the outset, housing schemes can be designed to meet a broader range of needs, including more shared ownership properties.
As well as the benefit of sharing resources and spreading risk, this approach could create developments more targeted to the local area, generating quicker sales and better returns.
The commercial reality is that shared ownership actually deploys a comparatively good return on capital, bringing much needed funds to help invest in new housing stock – it’s a virtuous circle. So rather than viewing shared ownership as something that slowly erodes the provision of housing, perhaps it’s time we took a fresh look, realise its potential and leverage the stock to increase the supply of housing, shared ownership or otherwise.