Times are tough for first-time buyers trying to battle their way onto the property ladder. Mortgages are still hard to come by, prices remain elevated, and access to ownership remains low.
Small wonder that many FTBs (as the industry calls them) reach for shared ownership (SO) as the solution. It's a way in, a step on the ladder, by buying a share of your property from a housing association and then paying a (subsidised) rent on the rest. The longer you live there, the more chance you will have to buy shares and "staircase" up. Plus – contrary to these straitened times – you can start to buy a property with a small deposit: 5 per cent to 10 per cent of the share that you are buying. It is a small but significant sample of the housing market (there were around 170,000 first purchases of SO units by 2009) and one that has been heavily promoted to young buyers in recent years.
It sounds a reasonable solution to the affordability crisis. But is it so great? Jeannie Brehaut, a yoga teacher, regrets the day she bought her shared ownership flat in the Barbican area at Lamb's Passage, London, three years ago.
"It has been nothing but trouble," she says. "Basically, One Housing Group [her housing association] want shared owners like me to buy. But once we move in they are not accountable – even though the lease is with them and they are landlord and joint owner."
Brehaut bought her flat as part of a shared ownership deal and feels that the whole thing has been a farrago of problems, from "eco" features that don't work to poor repairs.
"There's a biomass heating system installed which was part of the eco-friendly appeal of the development but it has never been turned on," says Brehaut, who is also furious at service charges that have never been itemised despite what she says are repeated requests; "an appalling response to major maintenance issues" – including repeated leaks from a badly installed eco-lavatory system in her flat – and no hot water and heating for extended periods. Brehaut claims she was forced to appeal to the NHBC (the National House-Building Council) – the standard-setting consumer body for new-builds – when these problems were not rectified. The NHBC then forced the developer to act, she claims.
If she had been a private buyer or a social housing tenant, it would have been simpler, she believes.
"I also had to instruct a solicitor and visit my local MP just to get repairs started," she says.
The One Housing Group refutes Brehaut's allegations: "Following completion of all new-build developments we undertake a snagging exercise to check for problems and defects. This usually picks up all problems, but unfortunately in a few instances this does not pick up all issues," says a spokeswoman.
"Nicholas King Homes, the construction company employed by One Housing Group, were responsible for fixing any defects at our Lamb's Passage development during the 12-month period following completion.
"We have addressed all defects and issues with the Lamb's Passage development in a timely manner and made every effort to rectify them as soon as possible, keeping residents informed throughout the process.
"Where an issue has taken longer to resolve we have made sure to advise residents of the likely delay."
The housing association also denies that it received any complaints from the local MP or residents about the development.
One might argue that Brehaut's problems are not specific to shared ownership. But her case points to structural problems in the model.
Timothy Waitt, a solicitor with Anthony Gold Solicitors of London – who acted for Brehaut – is unhappy with the way that shared ownership tends to be administered.
"Shared ownership leases are carefully drafted by the housing associations' lawyers to protect their interests rather than the tenant-buyer, and unfortunately the law has not worked out a way to balance their competing rights," he says.
Thus, certain leasehold problems disproportionately bedevil SO properties, such as the tenant's right to have repairs done.
"It's a common myth that housing associations will have an interest in the property and will therefore work with the shared-ownership tenant," says Waitt. "Paradoxically, they often treat the tenant as if the property is theirs alone and resign all interest, apart from collecting rent and service charges. They then do nothing to enforce repairs against the freeholder."
The model creates ambiguity to the benefit of the landlord.
It's a charge that the shared ownership industry denies, but buyers' interest groups are critical.
The lobby group Priced Out, which campaigns for affordable homes, is not keen on shared ownership schemes from an FTB perspective.
"Shared ownership as a concept is not going to solve the housing crisis facing young people and families in this country," says Katherine John, a spokeswoman for Priced Out. "It does more to help house-builders struggling to shift their over-valued flats than homebuyers."
Marc Vlessing, a developer who created a company, Pocket Homes, for struggling first-time buyers, is highly critical of shared ownership, with a major objection being that it is often subsidised by the Government.
"Most registered social landlords (RSLs), which often administer SOs, are private but constituted as charities," he says. "They are dependent on grants, which go towards new-build programmes."
Therefore, he says, the private sector is using subsidies for SO to get in on the low market, on the basis that they are selling "affordable housing".
"If they succeed they make money; if not, they are buffeted. They socialise their losses and privatise their gains."
John recognises SO has a place in a poor, under-supplied housing market.
"I wouldn't want to steer anyone away from it," she says.
At the same time, she thinks it is at best a "sticking-plaster solution". "SO has its merits, but it is using public money to prop up the property market," she says. "The point is that prices need to return to a normal level."
There are also criticisms that SO deals can have structural flaws. Therefore, some SO tenants end up paying more than a market equivalent for their flats, while others have ambiguous leases. They may also be potentially difficult properties from which tenants can trade up. "We would urge first-time buyers to be very cautious about opting for SO, which they may remain trapped in if they want to start a family and move to a bigger property," says John.
This is what happened to Elizabeth Mearns, who bought an SO flat in Wandsworth with her partner 12 years ago and then realised she couldn't move up into a larger SO property and grow her family because of the lack of opportunity within the SO system.
"It was difficult to move on to a three or four bedroom SO place, as they were being sold on to the lucrative private sector," she says. "So we had to find housing elsewhere and lose whatever benefit we gained from our SO set-up."
Now Mearns believes that SO serves to "keep the market inflated", and believes that the system works for developers, rather than FTBs.
"They often suggest the developer is doing you a favour, but people get stuck onto the first rung of the property ladder," adds Mearns.
Vlessing recognises this as SO overly caters for singles and couples.
"If there's any real SO need, it's for those many families who fall between social and private housing," he says.
There's another issue sometimes associated with SO: that tenants don't know where they stand.
"There's category confusion as attitudes are often that of being renters rather than owners," says Vlessing. SOs are a bit of both.
The mixed-tenure blocks in which SO flats are usually situated can also be part of the problem, as Brehaut has found.
"There have been problems in this block between the differing ways of life of shared owners and some local authority tenants," she claims. "SO buyers need to be aware of the potential of having an anti-social tenant as a neighbour."
Housing Minister Grant Shapps MP realises that the squeeze is on for FTBs: "I want to be clear that just as anyone buying with a mortgage can feel their new house is their home, so should anyone buying through a shared ownership property," he says. "I'm determined that we pull out all the stops to help those who want to get on the property ladder to do so."
Shapps, who is quick to point out he has held meetings with industry leaders and launched the new FirstBuy scheme for those struggling to save up a deposit, articulates the view that the first-time buyer situation will not disappear without a supply remedy.
"We're also looking to increase house-building, including scrapping density targets that contributed to a lack of family homes," he says.
The Coalition's Affordable Homes Programme aims to build up to 170,000 new homes by 2015, of which 80,000 are allocated for affordable rent or affordable home ownership. Almost one-third of these are to be three-bedroom-plus family homes.
John and her colleagues from Priced Out, who have been burning the midnight oil trying to find ways forward for "generation rent", says the Government "needs to focus on long-term, structural reforms, including strengthening tenants' rights, building more homes and enforcing sensible lending".
Meanwhile, many young buyers will reach for there SO. For many wishing to own their own homes, there is no alternative.