The shared ownership market is complex for homeowners to understand and lacks essential data for proper oversight, the National Audit Office (NAO) has found.
The NAO singled out a lack of market data, high service charges, staircasing issues and issues with consumer redress as particular problems.
For example, the audit body found that the Ministry of Housing, Communities and Local Government (MHCLG) requires private registered providers to submit data on shared ownership, but that “complete data is often not submitted, and MHCLG does not routinely escalate or enforce cases of non-compliance”.
As another example, the NAO said market data does not capture households’ reasons for leaving shared ownership or whether any exits occur through distressed sales because those in the property can no longer afford it.
The NAO said there are currently more than 250,000 households in shared ownership homes in England, up from 202,000 in 2020.
Overall the MHCLG does not fully understand customer journeys and experience, the NAO said, although it said improvements have been made.
The auditor also flagged up redress as a potential issue, adding that shared owners may not know all the routes of redress and advice available to them.
Similarly, service charges can be unclear, the NAO said, and it can be difficult for shared owners to contest them.
The auditor gave the example of one shared owner who saw service charges rise by 170% in two years of ownership, with another seeing a 39% increase in two years, to £4,589 per year.
Much of the shared ownership issues overlap with those of leaseholders, the NAO said, as all shared ownership is leasehold.
The NAO added that hope may be on the horizon in the form of the Leasehold and Freehold Reform Act 2024, which aims to address issues such as transparency over service charges and ability to extend leases.
