Blog & Articles

Category: Housing

Shared ownership: a role for funders?

Date: 7. March 2014
Vidhya Alakeson

In a country in which home ownership dominates aspiration and offers families the greatest security, getting a foot on the ladder is a social issue.

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Shared ownership can put a roof over the head of Generation Rent

Date: 22. November 2013
Vidhya Alakeson

With house prices out of reach for many, shared ownership could be the next big thing – but only if it makes some serious change.The gap between renting and owning with a conventional mortgage, even a high loan-to-value mortgage, has become unbridgeable for low and modest income families in some parts of the country, not just London.

Take Cambridge as an example. A couple with one child with a net income of £22,000 would have to spend 85% of their income on monthly mortgage payments if they had a 95% mortgage on a two-bedroom property. While the barriers to ownership are high, the aspiration to own remains strong, and there are good reasons to promote ownership, not least the fact that welfare spending on housing benefit and pensions will rise dramatically if large numbers enter retirement and still have to pay rent. Shared ownership can act as a bridge to home ownership for those on lower incomes, but to meet the needs of millions not a few hundred thousand, the product would need to change and be massively scaled up.

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Shared ownership could help plug the housing gap

Date: 20. November 2013
Hannah Fearn

Home ownership is in decline. Rising house prices, falling wages and restrictions on mortgage lending have left this common aspiration far out of the reach of the vast majority of low- and middle-income households.

Though today 64% of Britons still own their home, that figure is fast dropping, in no small part due to coalition policy. Help to Buy, an equity loan from government on properties worth up to £600,000, is over-inflating an already swollen housing market. London, where the impact is being felt most keenly, saw average prices rise by more than £50,000 in a month between September and October.

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Kickstart institutional investment to build new homes for generation rent

Date: 30. October 2013
Katie Blacklock

Investors have long enjoyed a love/hate relationship with property. An asset class dominated by commercial real estate, it delivers diversification and a reasonable yield in the good times. But in difficult times, upward-only rent reviews vanish, and fund managers are left wrestling with high voids and bad debts.

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How to revive build to rent

Date: 18. October 2013
Vidhya Alakeson

The private rented sector is fast becoming the only housing option for low to middle income families. Even with Help to Buy, home ownership is too great a stretch for many, especially in expensive areas and they are very unlikely to get access to affordable housing. The UK’s private rented sector though remains characterised by older properties, short term tenancies and variable quality. What’s more, the market is dominated by small buy-to-let landlords who own one or two properties each – just one tenant in ten rents from a professional, large landlord. Families in “generation rent” deserve a better deal and private finance can provide part of the answer.

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Building homes for ‘generation rent’

Date: 14. October 2013
Vidhya Alakeson

The private rented sector is fast becoming the only housing option for low-to-middle-income families. Even with Help to Buy, home-ownership is too great a stretch for many, especially in expensive areas, and they are very unlikely to get access to affordable housing. We need to increase the supply of market rented homes as well as providing a different product that offers greater security, is more affordable and better managed to meet the needs of long-term tenants and the growing number of families with children who are making their home in the private rented sector.

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Some home truths

Date: 22. July 2013
Vidhya Alakeson

In Britain today, a couple earning £22,000 with one child looking to buy a home are priced out of almost 40 per cent of local authorities.

How did we end up here? And where in Britain can low-income working families afford to live? According to our report Home Truths–published last week, a third of the country’s privately rented accommodation is also out of reach to the family described above.

To live in these areas they would have to spend more than a third of their net income on housing–widely considered unaffordable.

Large swathes of southern England are now out of reach and the situation in London is particularly acute. With the honourable exception of Bexley, there is no local authority in London where renting privately or owning with a 90 per cent mortgage is affordable to families in the bottom half of the income distribution.

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Search for a housing strategy

Date: 17. July 2013
Giselle Cory

The housing crisis has built up over time and can’t be fixed overnight. But there are things the government can do to make homes more affordable to lower-income families

Much of Britain is unaffordable to lower-income, working families according to Home Truths, a report published this week by the Resolution Foundation.

The report finds that a third of local authorities are unaffordable to a low-income couple on £22,000 and with one child who are looking to rent privately, while around four in ten are beyond the reach of the same family if they want to buy a house with a mortgage. Affordable in the context of the report is defined as rent or on-going mortgage costs taking up no more than 35% of a household’s net income.

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The housing crisis is pricing workers out of ever more of Britain

Date: 16. July 2013
Vidhya Alakeson

The fact that many ordinary working families are priced out of central London boroughs such as Westminster, Kensington and Chelsea and Islington will surprise no one. But a new report by the Resolution Foundation shows that there are now affordability black spots across all parts of the country where low and middle income families would have to spend more than a third of their income on housing to find a decent place to rent or buy. Working families are being priced out.

A couple with one child on £22,000, for example, has to spend more than 35 per cent of its net income – a commonly accepted ceiling for affordability - to meet the ongoing costs of a mortgage in nearly two fifths of all local authorities. If the same family wanted to rent privately, they would find that renting was unaffordable in a third of all local authorities. Housing costs are becoming a struggle even for median income families on £28,000.  In one in 16 local authorities, rent would eat up more than 35 per cent of their income. And in London, there is no local authority where a family on £22,000 can rent even a modest a two-bedroom property and pay less than 35 per cent of their income in rent.

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