Vistry published a white paper on the shared ownership model, which is currently under development and being informed by discussions with the National Housing Bank and policymakers. Choice-led shared ownership allows eligible first-time buyers to buy a qualifying new-build home on shared terms with minimum public subsidy.
Under the scheme, a new-build home would be purchased at a minimum share of 60% using a traditional mortgage and the shared owner paying 3.5% rent on the remaining share, with rent rises based on a “defined formula”.
The remaining 40% share would be supported by institutional funding, made up of a lender-provided debt tranche and a proposed 1% equity contribution from the National Housing Bank.
Similar to the existing shared ownership scheme, the buyer would be able to staircase to 100% ownership.
Along with the existing shared ownership model, Vistry said this would improve consumer choice and give an option to buyers who are more capable of purchasing than a standard shared owner, but face barriers due to deposit requirements and affordability.
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It said the terms would bring buyers closer to full ownership sooner and require a smaller deposit.
Its white paper said the new model would generate investment opportunities as homebuilders could pledge how many additional homes they would deliver through the scheme. Vistry said clear terms and guarantees could attract private investment and the funding from the National Housing Bank would not be needed once the scheme scales and becomes more popular.
The firm said the investors it had engaged with for the white paper had already expressed interest in committing more than £13.5bn over five years.
Vistry has urged support from the National Housing Bank to roll the product out nationally.
Stephen Teagle, CEO, partnerships and regeneration at Vistry, said: “This report demonstrates that choice-led shared ownership is implementable and scalable, offering a practical route to more accessibility and affordability for first-time buyers. It also has the potential to make a significant contribution to GDP and housing delivery, with minimal reliance on public subsidy.”
“It is clear that momentum is building behind this concept. Government and the housing and investment sectors now have an opportunity to turn that momentum into action, supporting economic growth while helping more first-time buyers’ access to high-quality new homes.”
The white paper also recommended establishing a Choice-led Shared Ownership Taskforce to bring UK homebuilders together with support from the Ministry of Housing, Communities and Local Government.
The taskforce would be responsible for creating an operational model, a pipeline of opportunities for investors and engaging with consumers.
Alex Notay, chief executive at The Housing Forum, said: “Tackling the housing crisis requires all elements of the housing ecosystem to be firing on all cylinders and this white paper on choice-led shared ownership is a strong contribution to that collective effort.
“We have called for practical, cost-free measures that government can swiftly enact to unlock supply and support new buyers. These proposals align with that agenda and help to move the sector towards solutions that are genuinely responsive to first-time buyer needs.”
Paul Rickard, chief executive at Pocket Living, said: “For the first time in 60 years, there is no support for first-time buyers. Our recent first-time buyer commission illustrated the importance of new sector-led ideas and the creative thinking in this report frames the debate we need in order to support home builders, home buyers, and leverage in institution investment that remains nervous of UK residential housing.
“Critically, this proposal also has the potential to support SMEs like Pocket as much as national providers.”
