When Cherida Plumb bought her first shared-ownership home, she was grateful for the scheme as it allowed her to get on the property ladder.
However, she deeply regrets buying her second one, which she lives in with her partner Adam Carter, as it has restrictions which means they can only ever own 80 per cent of the property. She fears they will encounter difficulties when they come to sell it.
“Our house is in a village in a designated protected area,” said Cherida. “This means it has an 80 per cent staircasing cap, so the home can never fully be ours as there is no option to buy the remaining 20 per cent.
“It also means we are always going to have to be paying rent, which is going to be a financial burden as we get older. We are almost mortgage-free, but I fear being trapped in this property and forever having to pay rent.”
A designated protected area is a specific geographic location, typically a rural parish or local authority area, where affordable homes are legally protected from being permanently absorbed into the private housing market.
Introduced under the Housing and Regeneration Act 2008, these designations ensure that grant-funded affordable housing remains available for local communities.
However, Cherida says with an influx of new shared ownership homes being built all the time, the concern is that anyone looking for a home will choose one which is not riddled with such restrictions.
Cherida, 55, who works for a charity, bought her first shared ownership home in 2005 in Banbury, Oxfordshire, and initially owned 50 per cent of it.
“I ended up staircasing to 100 per cent of the property and I sold it in 2020 because I wanted to move in with my partner. I put my money into this home because it was affordable for us.”
Staircasing is the process of buying additional shares in a shared-ownership property. It allows people to gradually increase the percentage of the home they own, until they eventually own it outright.
When people buy a shared-ownership home, they typically purchase between 25 per cent and 75 per cent of the property and pay rent on the remaining share to a housing association or landlord.
If they buy more shares and own more of the property, the amount of rent they pay decreases proportionately.
However, for Cherida and her partner, this is not the case, and on top of that the couple will need to find the money to pay for a lease extension at some point, as there are only 88 years remaining on the lease.
Cherida says no one warned them about the additional costs associated with the property.
Cherida says that even when they are mortgage-free, the couple will have to pay rent as long as they remain in this houseCherida’s partner Adam, a self employed handyman, bought the two-bedroom shared-ownership semi-detached home in 2020 for around £133,000, and Cherida put the money from the sale of her home into the property too.
As they own 80 per cent of the property, in the village of Byfield in Northamptonshire, they have to pay rent on the remaining 20 per cent, which is about £160 a month.
Cherida says there are around 10 homes on their street and three of them are shared ownership under this scheme, while the rest are social housing.
One of their neighbours, who had a shared ownership under the same 80 per cent scheme, put his home up for sale but struggled to sell, and Cherida fears the same fate.
“My neighbour has managed to sell his home now, but it was on the market for over a year and he had to reduce the price a few times,” she said. “Estate agents told our neighbour that they had a lot of interest in the property, but as soon as people heard there was an 80 per cent cap, they didn’t want to know and looked elsewhere.
“The reason the home has the cap is because it is supposed to be protected rural housing for the community. When you buy these homes, you have to demonstrate your link to the village and my partner had to write a letter saying why he wanted to move to Byfield. You also have a cap on how much you earn in order to buy these homes.
“We are not allowed to do anything to our home that will increase its value, because that would put it out of the price bracket for people on lower incomes who want to buy a shared-ownership home.
“However, they are now building new shared-ownership homes in the next village and are talking about building some over the road from us. If these are sold without a cap, it will disadvantage us even more as people will want to buy a home that is more flexible.”
Cherida, who is originally from Manchester, says they are not looking to move at the moment as her partner’s daughter is 14 and at school, but they would eventually like to move back up north.
“This 80 per cent cap is a massive issue for us – if we didn’t have that, our home would be a lot easier to sell. For me, it is a big regret and I wish we had hedged our bets and found something else,” she said.
Sue Phillips, founder of Shared Ownership Resources, which champions the interests of shared owners, said: “Staircasing caps and local connections criteria were intended to ensure that scarce affordable housing in rural areas remained available to local people.
“However, in the new ‘Build, Baby, Build’ world, these restrictions are increasingly obsolete – in some areas, at least. Consequently, a number of shared owners are finding themselves trapped in unsellable rural homes.
“Why would a homebuyer purchase a property with such restrictive terms when they can buy a brand new shared-ownership home, perhaps just down the road, with improved benefits and none of the downsides associated with designated protection area schemes?”
A spokesperson for the Ministry of Housing, Communities and Local Government said: “It is important buyers have clear information about how these schemes work, including any restrictions and how they may affect them.
“We’ve already taken steps to improve transparency through the Social and Affordable Homes Programme and are working with the sector to ensure shared ownership is a fair and effective route into homeownership.”
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