Pepper Money presents shared ownership white paper to Downing Street to push for a more inclusive housing market

The Government is being urged to implement reforms to its shared ownership policy following a visit to Downing Street from market leading specialist lender, Pepper Money. Rob Barnard, Intermediary Relationship Director at Pepper Money presented Pepper’s white paper to No.10, underscoring the lender’s long-term commitment to the tenure. 

Commissioned and released by Pepper Money, “Shared Ownership – A Vital Bridge to the Housing Market”, has reaffirmed the vital role which shared ownership plays in an ever changing and increasingly complex housing market. The white paper calls for a more inclusive shared ownership market and comes ahead of the publication of the Government’s full prospectus for the new Social and Affordable Homes Programme in Autumn, following Ministers’ confirmation that shared ownership will continue to be included as part of the UK’s affordable housing mix. 

Working with two independent experts, including Former Bank of England economist Rob Thomas, and former Chief Secretary to the Treasury David Gauke, the white paper has focused on three policy recommendations. Each of the recommendations have been drafted to safeguard the future of shared ownership, ensuring it evolves in line with economic realities, supports financial recovery and plays a central role in the Government’s housing ambitions. 

At the heart of Pepper’s recommendations is a desire for more people to access shared ownership through financially responsible and sustainable methods.   which will increase accessibility for shared ownership, give confidence in its future as a form of tenure, and increase transparency to improve long-term decision making. 

In the white paper, Pepper Money have called for:

• The introduction of an independent body to regularly harvest and publish industry data to equip policymakers and wider stakeholders with an evidence-based picture of the successes of the tenure as well as indicators of where it needs to evolve to meet the needs of future shared owners. 
• An increase to the household income threshold each year in line with average earnings growth, from the current £80,000 cap nationally and £90,000 in London. The current threshold hasn’t moved since October 2016, meaning it’s fallen by 35% in real terms due to inflation. If the thresholds aren’t adjusted for earnings growth, these risks creating a situation where shared ownership locks people who have no other routes onto the housing ladder out of the market, which could undermine both demand and supply
• A review of Homes England’s Capital Funding Guide, to create a more standardised approach that accommodates customers who are ‘just off the high street’

Rob Barnard, Intermediary Relationship Director at Pepper Money, said: “Shared ownership offers a vital bridge to the housing market for so many people who otherwise would struggle to buy their own home, but we know without action, this bridge will get harder to use for those who need it. 

“Our policy recommendations are pragmatic, cost effective, and provide certainty for the sector to ensure that shared ownership continues to be the vital pathway to home ownership so many rely on. The Government has rightly outlined their ambition to build 1.5 million homes by the next election, and that can only be achieved by supporting a range of types of home ownership, including shared ownership.

“The unintended consequence of the status quo is a less viable tenure, with shared ownership becoming less accessible for financially capable people seeking their own home and has the potential to undercut the Government’s own bold house building ambitions.

“At Pepper Money we see people achieving their housing dreams through shared ownership and we are committed to doing what we can to ensure this can continue. We’ve taken our message and our request directly to the heart of the Government, and into the hands of the Prime Minister’s team, and we urge them to act in the forthcoming Affordable Homes Programme to give certainty and a successful future to the tenure. We look forward to engaging with Government where possible to make the housing market more inclusive through financially responsible and sustainable methods.”

Pepper Money is a specialist lender serving customers who sit ‘just off the high street’, this includes the self-employed, single parents, those with complex incomes or individuals on the path to financial recovery following life events like redundancy or relationship breakdown. The lender’s customers do not have fundamental affordability problems, but rather situations where standard high street criteria don’t capture the full picture of someone’s financial capability. There is a need to fill the void for those who fall off the high street within the shared ownership tenure, with Pepper reporting a 21% uptick in shared ownership customers last year. While doing rigorous credit checks, Pepper applies a more compassionate, responsible and realistic view of people’s circumstances in the aim to enable more financially capable people to access the housing market in responsible and sustainable ways. 

Along with the recommendations for policy reform, the white paper also highlights the significant affordability gap that shared ownership has helped to bridge. In 2023–24, the average shared ownership buyer purchased a 40% stake in a home worth £313,100, putting down a deposit of £22,800 and borrowing £99,200 (see Table 1 in notes to Editors). By comparison, the average first-time buyer across England now requires a deposit of £69,000, more than three times higher than those purchasing with shared ownership, and a mortgage advance of £223,000. In London, the deposit gap is even wider, reaching £155,000. The figures underscore the vital role shared ownership continues to play in widening access to homeownership, particularly for those otherwise locked out of the market.