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Shared ownership: the fourth tenure? – Hunjan

by: Rupi Hunjan, CEO and founder of Censeo Financial
  • 06/03/2023
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Shared ownership: the fourth tenure? – Hunjan
Affordability for housing, especially the first-time buyer market, has been a massive concern for as long as I can remember. This is usually due to demand out stripping supply pushing prices up. 

There is also a perception of homeownership being intrinsic to one’s values and beliefs which helps lead to financial inclusion and higher status.  

This obsession is also key to the socioeconomic wellbeing of the UK economy. 


A warped view of success? 

In the UK, even though homeownership seems to be linked to status and success in most people’s lives, this is not the case in many parts of the world and it is higher than what some people deem as a natural. 

Maybe this model or experiment hasn’t worked or is still a work in progress. 

It has got to a point where renting is perceived to have a socioeconomic stigma attached to it and is seen as a default opposition to ownership.  

This has resulted in different types of innovative schemes which have led to a myriad of affordable tenures, of which shared ownership is seen as the winner. 


The true worth 

Basically, having part of an asset class like a residential property is better than having nothing at all. 

It comes down to what you can afford to pay every month. Hence, a home is a home regardless of how it is paid for. 

Today, affordability is governed by your monthly outlay over and above the cost of the item. This is true in many respects such as buying a car or a phone.  

Nobody asks how much something is worth, but what it costs per month. 

Unless supply goes up, demand comes down, lenders decide to lend more or prices drastically reduce, we have a situation where buying a house is going to remain unaffordable for many people, especially first-time buyers.  


Reimagining the scheme 

However, there may be a glimmer of hope and this may be shared ownership. 

It is a secured tenancy which gives tenants a financial interest in the property in return. 

Although, this could still be reworked. How about a model which promotes renting first and then ownership? 

I imagine a scheme which helps you rent and lets you buy a small share of the home, meaning we start referring to shared ownership not as a new way to buy but as a new way to rent.  

Factoring in the introduction of the 10 per cent share and more institutional landlords coming into the market, maybe this is the trajectory that shared ownership should be taking. 

So, let’s stop being obsessed with buying and start thinking there’s nothing wrong with renting.  

As long as it helps get more people into homes and helps them feel intrinsically better, it’s not a bad thing. 

It certainly ticks a lot of boxes: affordability, financial inclusion, security of tenure and potential to staircase. 

It also extinguishes the stigma of renting and gives people hope. 

The term ‘fourth tenure’ and the ideas of ‘part buy part rent’ or shared ownership are here to stay so it may just be the best tool for a more inclusive society. 

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