Sharing the spoils event: Vidhya Alakeson presentation

of 25

Please download to get full document.

View again

All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
PDF
25 pages
0 downs
10 views
Share
Description
Low to middle income households are increasingly shut out of traditional home ownership, and more and more families with children are living in the private rental sector. We know, however, that home ownership overwhelmingly remains most people’s preferred tenure and the lack of asset accumulation amongst long term renters is a concern. In this presentation Vidhya Alakeson summaries the report 'A foot on the ladder', which argues that shared ownership needs to be understood as the fourth tenure in the UK housing market. For full report go to http://res-fdn.org/18IS4oP
Transcript
  • 1. …………………………………………………………………………………………………….. A Foot on the Ladder: How shared ownership can bring ownership into reach Vidhya Alakeson Richard Donnell Ben Marshall Geeta Nanda David Lammy MP Patrick Butler @resfoundation #sharedownership
  • 2. …………………………………………………………………………………………………….. A Foot on the Ladder: How shared ownership can bring ownership into reach Vidhya Alakeson Resolution Foundation www.resolutionfoundation.org @resfoundation #sharedownership
  • 3. Home ownership is in decline …………………………………………………………………………………………………….. Housing tenure, England Housing tenure, London Housing tenure, under 35, low to middle income households ………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………………… #sharedownership
  • 4. But good reasons to promote ownership …………………………………………………………………………………………………….. • Aspiration to own remains strong – 92% of our survey respondents would prefer to own • Ownership currently offers greater security of tenure • Satisfaction highest among home owners • Asset building – large wealth gap between owners (mortgaged and out right) and renters – Median wealth including property among mortgagors £245,000 – Median wealth including property among private tenants £25,000 (social tenants - £15,000) ………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………………… #sharedownership
  • 5. Help to Buy helps those whose principal barrier is a deposit Peter and Sue Cambridge: Help to Buy: Monthly costs: £1557 (85% net income) Shared ownership: Monthly costs: £772 (42% net income) Exeter: Help to Buy: Monthly costs: £970 (53% net income) Shared ownership: Monthly costs: £481 (26% net income) Net household income: £22,000 London Borough of Kingston: Help to Buy: Monthly costs: £1724 (94% net income) Shared ownership: Monthly costs: 855 (46%) ………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………………… #hometruths
  • 6. The case for shared ownership …………………………………………………………………………………………………….. …………………………………………………………………………………………………….. Low and modest income households • More affordable – bridge between renting and owning • Greater security than today’s PRS • Route to asset building • Lower risk than conventional mortgage – (but smaller asset) Housing market • Source of new supply • Improving liquidity in the overall market • Equity funded models reduce market volatility ………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………………… #sharedownership
  • 7. But the current product is not fit for a bigger purpose …………………………………………………………………………………………………….. • Not consumer-focused and differentiated by consumer group: staircasers and long term part-owners • Inflexible – too bound up in rules and regulations set by government, local authorities, lenders and providers • Lack of scale – hard to get into and small secondary market limits moving easily within shared ownership ………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………………… #sharedownership
  • 8. Lessons from innovations so far …………………………………………………………………………………………………….. ………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………………… #sharedownership
  • 9. Lessons from innovations so far …………………………………………………………………………………………………….. • Innovations take time to be understood • Innovations too often start with providers not consumers • Savings need to be built in to the product • Flexibility is critical – for the product and for providers • Investment and lender buy-in require scale ………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………………… #sharedownership
  • 10. Designing the product for the future …………………………………………………………………………………………………….. • One product with multiple entry routes: traditional shared ownership, home purchase plan, rent to buy • Two distinct customer segments – stronger incentives to staircase for one and greater mobility and asset protection for the other • Greater choice over property types: the return of DIYSO • New set of standards focused on flexibility, simplicity and transparency ………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………………… #sharedownership
  • 11. Making shared ownership the fourth tenure …………………………………………………………………………………………………….. • A new equity fund to support new shared ownership homes • A more proactive role from local authorities in planning for and supporting shared ownership • The development of larger portfolios of assets across the sector to kick start the institutional market • A new approach from Housing Associations – equity to facilitate development and DIYSO, consolidation and coordination across the sector, core product not a cross subsidy ………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………………… #sharedownership
  • 12. …………………………………………………………………………………………………….. A Foot on the Ladder: How shared ownership can bring ownership into reach Vidhya Alakeson Resolution Foundation www.resolutionfoundation.org @resfoundation ………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………………… #sharedownership
  • 13. “You can just about afford to rent so what makes you think you can afford to buy a house…” “It’s like when it says on the news the average person buying a house in London is in his 40s, so that don’t give no hope for young people or anyone really.”” “I think there’s a lot of misinformation [about shared ownership] because where do you hear about details and stuff like that? I just heard of it years ago, I just thought it’s for nurses…” @BenM_IM #sharedownership
  • 14. Why? Q 14 And what, if anything, do you think are the main causes of the current housing crisis in London? (spontaneous) % 47 Affordability of housing/ house prices 39 Over-population/ immigration 37 Lack of building/ housing supply/ investment 14 Planning/ ability to build/ land availability Government policy including Government policy welfare reform and legacy of Right to Buy Economic backdrop/ lack of financing 5 Local government policy (e.g. housing allocation) 5 7 Renting - poor landlords 3 Poor housing choice 2 Poor housing quality 1 But to Let/ people buying properties and not living… 1 Base: Londoners who agree there is a housing crisis in London (829), 18 - 29 October 2013Source: Ipsos MORI/London Councils © Ipsos MORI Version 1 | Public
  • 15. Young/renters squeezed most by housing costs Q 15 Approximately, what proportion of your total household income AFTER tax and national insurance contributions, do you pay in mortgage payments or rent (excluding utility bills and council tax). Would you say it is….? More than a third Age group 24% 18-24 25-34 35-54 55-64 49% 30% HA rented Private rented / other 54% 35% 47% 16% Tenure LA rented 30% 42% 65+ Owned with mortgage A third or less (excluding nothing) 46% 31% 29% 31% 57% 38% 33% 36% Owners 31% Social rented (LA & HA) 30% 47% 57% 35% Base: 697 GB adults excluding those who own outright, 25 October-27 October 2013 Source: Ipsos MORI/Panorama © Ipsos MORI Version 1 | Public
  • 16. ‘Debt peril’ – some low tipping points 16 Q. Thinking about the total amount of outgoings your household has – that is the amount your household spends to cover living costs and bills – what is the lowest this would have to increase for you for start to find it difficult to afford? % By £25£49 per month % By £24 or less per month 27 22 18 11 Social renters 14 11 Private renters Base: 2,016 GB adults 16-75, March 2013 (313 social renters, 289 private renters and 1,384 owner/occupiers) © Ipsos MORI Version 1 | Public % By £50-£74 per month 13 11 11 Owner occupiers Source: Ipsos MORI for Halifax
  • 17. “Momentum behaviour”: house price/rent expectations 17 Q. Do you think the average property price in the UK will be higher or lower in 12 months time or will it be the same? [respondents given average UK house price sourced from Halifax HPI] 80 Rent outlook – balance of % higher minus % lower (+) +64 60 +40 +56 +56 +33 40 +15 20 +20 +9 House Price Outlook – balance of % higher minus % lower (+) 0 -20 Apr-11 Oct-11 Jan-12 Mar-12 Jun-12 Base: 1,000-2,000 British adults 16+ (c400 PRS) © Ipsos MORI Version 1 | Public Oct-12 Dec-12 Mar-13 Jun-13 Sep-13 Source: Halifax/Ipsos MORI Housing Market Confidence Tracker
  • 18. “The nearest the British have to a religion”? 18 Q. If you had a free choice, would you choose to rent accommodation, or would you choose to buy? % Buy 95% 90% 85% 80% 75% Pre war Baby boomers Gen X Gen Y Overall 70% 96 © Ipsos MORI Version 1 | Public 97 98 99 00 01 02 03 04 05 06 07 08 09 10
  • 19. For most, renting isn’t a tenure of choice 19 Q. If you were told that you had to rent, rather than buy, a house or flat for the rest of your life, how would this make you feel? 61% Unhappy 57% of non-homeowners…A similar proportion believe that people can never feel fully settled in rented property. 47% think it is important for parents to bring up children in a home that they own, not rent. Neither 19% 13% Over half (52%) predict that Britain will become a nation of renters within the next generation. Happy Source: ComRes for BBC (2,009 18-29s,19-20 June 2013) Source: Halifax, Generation Rent: A Society Divided? © Ipsos MORI Version 1 | Public
  • 20. Responsibility: it’s the market, stupid? 20 Q. Who or what do you think is most responsible for young people finding it difficult to get onto the property ladder? Size of deposits required 35% Property prices 33% The Government 11% The banks 11% Older generations for pricing young people out of the market I do not hold anyone responsible for the difficulty of getting on property… Yound people themselves 3% 3% 3% Base: All non-owning/mortgaged 18-29 year olds who think getting on the property ladder is difficult (1,748), GB, 20-27 March 2013 © Ipsos MORI Version 1 | Public Source: ComRes/BBC
  • 21. ‘The fourth tenure’? 21 Q. Would you consider buying a part share in a home…? % Don’t Know % Yes .,.whilst a governmentbacked scheme helped you buy the remaining share (shared ownership)? % No …with the assistance of a government-backed repayable low-interest or no-interest loan (shared equity)? …with financial help from a private developer shared ownership or shared equity product? 24% 27% 32% 36% 39% 46% 29% 27% 40% Base: All potential consumers (3,365) Source: HCA Consumer demand and attitudes in the intermediate market (Ipsos MORI 2010) © Ipsos MORI Version 1 | Public
  • 22. Scope to build awareness 22 Q. Which of the following, if any, best describes your attitude towards intermediate market housing? I am interested in buying or renting an intermediate market home and have already applied 1% I don’t know enough about intermediate housing to know if I am interested or not 21% 53% 24% I am interested in buying or renting an intermediate market home but have NOT applied I am NOT interested in buying or renting an intermediate market home Base: All potential consumers (3,365) Source: HCA Consumer demand and attitudes in the intermediate market (Ipsos MORI 2010) © Ipsos MORI Version 1 | Public
  • 23. Multiple barriers but info & eligibility key Q. Which, if any, of these do you think are barriers to buying a home through a shared ownership scheme? 23% Don't think I am eligible because of income 18% 16% Want to buy without funding from anyone Want more choice in type of property 14% Too difficult to sell on Too difficult to arrange mortgage for these schemes 12% Couldn't buy in location I wanted to 12% 9% Don't think I am eligible because of my job Don't want to go through application process Rules/conditions make it difficult to increase share/sublet etc 6% 4% 24% Don't have enough information to know 13% None/there are no barriers Other Base: 591 private renters 16+, 11-24 November 2011 3% Source: Ipsos MORI for Catalyst Housing
  • 24. Thank you! @BenM_IM #sharedownership
  • 25. …………………………………………………………………………………………………….. A Foot on the Ladder: How shared ownership can bring ownership into reach Vidhya Alakeson Richard Donnell Ben Marshall Geeta Nanda David Lammy MP Patrick Butler @resfoundation #sharedownership
  • Related Search
    We Need Your Support
    Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

    Thanks to everyone for your continued support.

    No, Thanks