Buyers entering shared ownership schemes face financial risks they often fail to understand, according to a report from the National Audit Office (NAO).
The independent watchdog has warned that shared ownership is a complex part-buy, part-rent model that exposes customers to unexpected costs and complications, particularly around increasing service charges and transaction fees.
“Shared ownership is a complex part-buy, part-rent model, not always fully understood by those who enter it,” the NAO stated. “Complexities with shared ownership mean customers can get caught out by issues such as increasing service charges.”
Growing market presence
Shared ownership has become the largest government-supported home ownership scheme following the closure of Help to Buy and new restrictions on Right to Buy. Annual delivery of new shared ownership homes has increased from 11,128 properties in 2014-15 to 20,353 in 2024-25, representing 11% of all new build home supply last year.
The NAO report identifies several concerns raised by customers, including rising service charges over time and transaction costs that apply each time shared owners purchase additional equity in their property. The watchdog also noted that “limited government data means it’s difficult to assess the scheme’s overall performance”.
Regulatory changes ahead
The implementation of the Renters’ Rights Act, the Social and Affordable Homes Programme, and changes to leasehold are designed to improve the experience of shared owners, though the NAO cautions these add to the complexity of the landscape.
Gareth Davies, Head of the NAO, said: “Shared ownership remains an important route into home ownership, but it is complex, and weaknesses in information, affordability, data quality and redress mean that government does not yet have a full understanding of how the model works for consumers.”
Market implications
The findings raise questions about consumer protection in government-backed housing schemes and highlight the need for improved transparency in the shared ownership sector. For property professionals and investors, the report underscores the importance of ensuring clients fully understand the financial commitments involved in shared ownership arrangements, particularly as the scheme continues to expand its market share in the new build sector.
The NAO’s assessment comes at a time when the property sector faces broader regulatory changes, including new rental legislation affecting various tenure types across the housing market.
