Cllr Nicholas Austin represents West Putney ward on Wandsworth council and has been working in the planning and property sector. His day job sees him specialise in river fronted property throughout South West London.
Thousands of hardworking people are trapped in homes they cannot sell, watching deposits built up over years of careful saving disappear, paying rent and a mortgage simultaneously on a property they will never fully own, while the housing association that holds the majority of the equity walks away without consequence.
This is not a market failure. It is a policy failure and the Conservative Party built it.
Margaret Thatcher did not win three elections by helping people buy a third of a house.
Right to Buy was transformative precisely because it was unambiguous. You owned your home, not part of it, not in partnership with a housing association that would control your exit and leave you holding the bill, all of it, outright, yours. Ownership changes people, and Thatcher understood why: it is not the asset that matters but what it represents. Independence. Responsibility. A stake in the country you live in.
Shared ownership is the precise opposite of that instinct.
It is what happens when politicians who have lost confidence in markets try to simulate affordability without actually creating it. Rather than confront the planning restrictions and regulatory accumulation that have made British homes grotesquely expensive, successive governments decided to help people buy homes they could not afford by selling them a fraction of one. The result is a product so structurally dishonest that it could only have been designed by a committee, approved by a quango, and defended ever since by people who do not live in one.
Consider what it actually involves.
A couple purchase a 30 per cent share of a London flat. They save for years, doing everything Conservatives have always told them to do. Six years later they need to move. The flat has fallen in value. In any commercial arrangement worthy of the name, losses are distributed according to ownership, the party holding 70 per cent of the equity carries 70 per cent of the risk. This is not a controversial principle.
It is how investment has worked since the Medicis.
Shared ownership does not work like that.
The housing association recovers the full value of its retained equity. The couple’s deposit evaporates. Before they can even instruct an estate agent, they must surrender an exclusive right to market the property to the housing association itself, which continues receiving rent on its retained share and faces no commercial penalty for delay, while the minority owner sits trapped, bleeding money month by month. When the nomination period expires, the housing association steps graciously aside and the couple pay every penny of agency fees, legal costs and disposal expenses for an asset they own less than a third of.
One struggles to imagine a shareholder agreement, joint venture or commercial lease that would survive five minutes of legal scrutiny on these terms. Yet we dressed it up as a Conservative housing policy and sold it to a generation of aspirational voters as a ladder in reality It is a trapdoor.
Housing associations will protest that they perform a vital social function. But a charitable purpose has never been a sound basis for a financial product, and good intentions do not make an inequitable contract equitable. If you own 70 per cent of an asset, you bear 70 per cent of the commercial risk. The moment that principle is abandoned, you no longer have a partnership, you have a racket dressed in the language of affordable housing.
This is precisely the moment for Kemi Badenoch to do what she has built her reputation on: saying the thing everyone in the room knows but nobody has been willing to put on the record. Badenoch has distinguished herself in opposition by refusing to indulge the comfortable fictions that brought the Conservative Party to its knees. She does not reach for the focus-grouped non-answer or the ministerial holding line. When something has failed, she says so. That reputation for directness is a political asset, but only if she is willing to spend it on something that matters.
Badenoch should stand up and say plainly that shared ownership was a mistake, that it transferred risk onto exactly the people it claimed to help, that its contracts would be laughed out of any commercial negotiation, and that a Conservative government would fix it. Not review it, not consult on it, not establish a working group. FIX it!
The fix is not complicated.
Housing associations must bear commercial risk in proportion to the equity they hold. If they own 70 per cent of an asset, they carry 70 per cent of the downside. Beyond that, shared ownership should be wound down and replaced with policies that make genuine, unambiguous ownership achievable, which means building more homes and confronting the planning consensus that has prevented it. That is a harder argument that will upset people. Badenoch should make it anyway.
The people trapped in shared ownership are our people, strivers, savers, the quietly aspirational who wanted nothing from the state except the chance to get on. They believed in the Conservative promise that ownership meant freedom. Conservatism used to know instinctively which side it was on. It is past time we remembered.
Cllr Nicholas Austin represents West Putney ward on Wandsworth council and has been working in the planning and property sector. His day job sees him specialise in river fronted property throughout South West London.
Thousands of hardworking people are trapped in homes they cannot sell, watching deposits built up over years of careful saving disappear, paying rent and a mortgage simultaneously on a property they will never fully own, while the housing association that holds the majority of the equity walks away without consequence.
This is not a market failure. It is a policy failure and the Conservative Party built it.
Margaret Thatcher did not win three elections by helping people buy a third of a house.
Right to Buy was transformative precisely because it was unambiguous. You owned your home, not part of it, not in partnership with a housing association that would control your exit and leave you holding the bill, all of it, outright, yours. Ownership changes people, and Thatcher understood why: it is not the asset that matters but what it represents. Independence. Responsibility. A stake in the country you live in.
Shared ownership is the precise opposite of that instinct.
It is what happens when politicians who have lost confidence in markets try to simulate affordability without actually creating it. Rather than confront the planning restrictions and regulatory accumulation that have made British homes grotesquely expensive, successive governments decided to help people buy homes they could not afford by selling them a fraction of one. The result is a product so structurally dishonest that it could only have been designed by a committee, approved by a quango, and defended ever since by people who do not live in one.
Consider what it actually involves.
A couple purchase a 30 per cent share of a London flat. They save for years, doing everything Conservatives have always told them to do. Six years later they need to move. The flat has fallen in value. In any commercial arrangement worthy of the name, losses are distributed according to ownership, the party holding 70 per cent of the equity carries 70 per cent of the risk. This is not a controversial principle.
It is how investment has worked since the Medicis.
Shared ownership does not work like that.
The housing association recovers the full value of its retained equity. The couple’s deposit evaporates. Before they can even instruct an estate agent, they must surrender an exclusive right to market the property to the housing association itself, which continues receiving rent on its retained share and faces no commercial penalty for delay, while the minority owner sits trapped, bleeding money month by month. When the nomination period expires, the housing association steps graciously aside and the couple pay every penny of agency fees, legal costs and disposal expenses for an asset they own less than a third of.
One struggles to imagine a shareholder agreement, joint venture or commercial lease that would survive five minutes of legal scrutiny on these terms. Yet we dressed it up as a Conservative housing policy and sold it to a generation of aspirational voters as a ladder in reality It is a trapdoor.
Housing associations will protest that they perform a vital social function. But a charitable purpose has never been a sound basis for a financial product, and good intentions do not make an inequitable contract equitable. If you own 70 per cent of an asset, you bear 70 per cent of the commercial risk. The moment that principle is abandoned, you no longer have a partnership, you have a racket dressed in the language of affordable housing.
This is precisely the moment for Kemi Badenoch to do what she has built her reputation on: saying the thing everyone in the room knows but nobody has been willing to put on the record. Badenoch has distinguished herself in opposition by refusing to indulge the comfortable fictions that brought the Conservative Party to its knees. She does not reach for the focus-grouped non-answer or the ministerial holding line. When something has failed, she says so. That reputation for directness is a political asset, but only if she is willing to spend it on something that matters.
Badenoch should stand up and say plainly that shared ownership was a mistake, that it transferred risk onto exactly the people it claimed to help, that its contracts would be laughed out of any commercial negotiation, and that a Conservative government would fix it. Not review it, not consult on it, not establish a working group. FIX it!
The fix is not complicated.
Housing associations must bear commercial risk in proportion to the equity they hold. If they own 70 per cent of an asset, they carry 70 per cent of the downside. Beyond that, shared ownership should be wound down and replaced with policies that make genuine, unambiguous ownership achievable, which means building more homes and confronting the planning consensus that has prevented it. That is a harder argument that will upset people. Badenoch should make it anyway.
The people trapped in shared ownership are our people, strivers, savers, the quietly aspirational who wanted nothing from the state except the chance to get on. They believed in the Conservative promise that ownership meant freedom. Conservatism used to know instinctively which side it was on. It is past time we remembered.