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It's relatively new. The basic idea is to bridge the gap between rental and home ownership: you don't need as big a mortgage to buy a share of a property, and y

It's relatively new. The basic idea is to bridge the gap between rental and home ownership: you don't need as big a mortgage to buy a share of a property, and you can benefit (proportionately) from any capital gains from the increase in value of the property. In that sense it's potentially more beneficial and opens up access to the property market; in practice it seems to help push up demand and therefore prices. In recent years it has arguably been too lucrative to be a landlord which has pushed back against home ownership and pushed up values; that's changing a little bit. Shared ownership schemes are a band-aid over a more general problem.

bsenftner 5y ago
That general problem being financial literacy. These sound like terrible financial deals.
Nursie 5y ago
> in practice it seems to help push up demand and therefore prices All of these schemes do that, because they address the housing market from the government-preserving invariant condition of "We can't ever let the market drop, we'd be voted out in a second" So they come up with schemes and financial products to allow more people to access home ownership in some form or other without impacting property values. See also stamp-duty holidays. More or less by definition these things increase demand and push house prices up further. It's insanity. It's also massively to my benefit as a homeowner who is about to leave the UK...
fy20 5y ago
It's worth mentioning the purpose is to provide low income families - there is a limit on how much your family can earn to be eligible - an opportunity to own a property that they otherwise could not afford. That limit is £80k (£90k London) which puts you well into the middle class though. There's no way someone working in a supermarket and supporting a kid on their own would ever be able to afford something like this.

bsenftner 5y ago

That general problem being financial literacy. These sound like terrible financial deals.

Nursie 5y ago

> in practice it seems to help push up demand and therefore prices All of these schemes do that, because they address the housing market from the government-preserving invariant condition of "We can't ever let the market drop, we'd be voted out in a second" So they come up with schemes and financial products to allow more people to access home ownership in some form or other without impacting property values. See also stamp-duty holidays. More or less by definition these things increase demand and push house prices up further. It's insanity. It's also massively to my benefit as a homeowner who is about to leave the UK...

fy20 5y ago

It's worth mentioning the purpose is to provide low income families - there is a limit on how much your family can earn to be eligible - an opportunity to own a property that they otherwise could not afford. That limit is £80k (£90k London) which puts you well into the middle class though. There's no way someone working in a supermarket and supporting a kid on their own would ever be able to afford something like this.