Issues with Shared Ownership Scheme: Rising Service Charges and Financial Stress

Josie Dom, a 53-year-old mother of two, was overjoyed when she moved into her new home in Colchester last October. Through the shared ownership scheme, she was able to purchase 30% of her home, making homeownership a possibility for her family. This scheme allows individuals who may not be able to afford a home outright to purchase a share of a property, paying subsidized rent on the rest to a non-profit housing association.

However, Josie’s excitement quickly turned to dismay when just six months after moving in, the housing association increased the building’s service charges by a staggering 138%. What was once an affordable option for her family suddenly became unaffordable due to the unexpected rise in costs.

Josie expressed her frustration, stating, “Obviously the idea of shared ownership is to help people like me that wouldn’t otherwise be able to afford their own home. Then suddenly, again, we can’t afford it. It makes a mockery of being shared ownership and having social housing.”

Josie’s story is just one of many shared owners who are facing skyrocketing costs and other issues, including difficulties in selling their properties. With rising mortgage costs, shared ownership may seem like an attractive option for buyers initially. However, the reality of unexpected service charge increases and other financial burdens has left many feeling trapped in their homes.

The Leasehold Advisory Service (LEASE) has seen a significant increase in the number of leaseholders seeking legal advice about service charges, with enquiries doubling compared to previous years. This growing concern highlights the need for more transparency and support for shared owners who are struggling with escalating costs.

As the government works to address these issues through the Renters Reform Bill and other proposed measures, shared owners like Josie and others are calling for greater accountability and fairness in the shared ownership scheme. With more awareness and support, shared ownership could continue to be a viable option for those looking to step onto the property ladder without the burden of full ownership.