Shared Equity Task Force

This page provides background information on the Task Force, its Terms of Reference, membership and key outputs.

Background

It is estimated that 1.3m households have incomes too high to qualify for housing benefit but too low (with conventional mortgage financing) to buy at the lowest decile for two and three bedroom homes.

In 40 local authorities, mostly spread between London, the South East and South West, 40 per cent or more of households fall into this situation. So there is significant potential demand for intermediate home ownership schemes to bridge the divide between social renting and full home ownership.

We know that market is now developing shared equity products for some of this group but:

what impact will they have and for how many?
what, if anything, should we do for those in this intermediate group still excluded from homeownership?

Objective

The objective of the Task Force is to consider the case for Government intervention in the housing market to assist intermediate households into home-ownership using shared equity products.

Terms of Reference

The Task Force will:

review, confirm, and if necessary update the evidence on the number and characteristics of the intermediate households affected
assess the benefits and risks, for individuals, the housing market, the mortgage market, and the wider economy of enabling homeownership for this group through the use of shared equity products
identify whether there are market or state failures holding back development by the private sector of shared equity products for this group, together with options for reform if necessary
take proper account of the regulatory regime that applies to these shared equity products, and how any proposed reforms would impact on that
if products for some of this group would only be viable with public subsidy quantify the numbers affected, the level of investment that would be required, and the most cost effective subsidy route for the Exchequer
determine the net social, market or economic benefits arising from homeownership that would justify public investment for some, if not the entire intermediate group. Given limited and finite public resources set out clear priorities for public assistance within the intermediate group
determine whether the same level of public investment channelled through new-build solutions or for open market purchase have significantly different impacts on the housing market
produce a report by end 2006 to inform the Comprehensive Spending Review

The work of the Task Force will include:

establishing an advisory panel to inform and/or test taskforce emerging findings. Membership of the panel to include experienced practitioners and academics with representatives from finance industry, house builders, Local Authority and Housing Association sectors
identifying which shared equity products have been or are currently in use, or that are in development in both public and private sectors and their affordability to individuals currently in the intermediate group
estimating potential take-up of current or in-development commercial models and their impact on the current intermediate group
modelling and assessing the impacts of increased use of shared equity on local, regional and national housing markets, the mortgage market, and the wider economy. This analysis to include likely impacts on labour mobility and the Private Rented Sector
establishing the regulatory requirements for different shared equity products
establishing to what extent the ongoing risks and obligations of homeownership are sustainable for members of the 'intermediate' group and define those for whom homeownership would be unsustainable.
establish practicality and value for money of different products for delivering public subsidy if justified

The work of the Task Force will not include:

consideration of other forms of personal support (eg benefits, personal tax allowances, tax credits, etc.)
consideration of other products for sustaining home ownership (eg insurance, sinking funds, etc.)
consideration of other factors impacting on cost of house purchases (eg stamp duty, VAT, legal and estate agent fees, etc.)

Shared Equity Task Force - Advisory Panel Members

Name

Organisation

Mr Graeme Moran
Mr Steve Rumbelow
Mr Piers Williamson
Mr Peter Williams
Mr David Pretty
Ms Kate Davies
Mr Andy Caton
Mr Paul Pedley OBE
Ms Susan De Mont
Professor Janet Ford
Professor Steve Willcox
Ms Julie Cowans
Ms Sarah Webb
Mr Adam Sampson
Professor Glen Bramley
Mr William Hill
Ms Kate Barker
Mr Mark Webster
Mr Paul Beardmore
Mr Rob Hopkins
Mr Neale Coleman

Metropolitan Housing Trust
Manchester Housing
The Housing Finance Corporation
Council of Mortgage Lenders
Barratt Homes
Notting Hill Housing Trust
Yorkshire Building Society
Redrow plc
Financial Services Authority (FSA)
Centre for Housing Policy
Centre for Housing Policy
Joseph Rowntree Foundation
Chartered Institute of Housing
Shelter
School of the Built Environment
Schroders
Bank of England
Nationwide Building Society
Rochdale MBC
Regenda Group
GLA

Further information and enquiries

Please contact:

Shared Equity Taskforce Secretariat
Zone 2/J10,
Eland House,
Bressenden Place
London SW1E 5DU

Email: sharedequitytaskforce@communities.gsi.gov.uk

Outputs

On 6 December 2006 the Shared Equity Taskforce published a report about the opportunities to increase the numbers of households able to access home ownership through shared equity products.

The main report is available on the HM Treasury (HMT) website (external link).

The accompanying presentation:

Who are low cost home ownership purchasers and what is the demand for low cost home ownership?

published by Communities and Local Government provides information on customers that have purchased homes through the Government's low cost home ownership programmes. It also presents estimates of potential demand for shared equity products.

In addition, the following related information is available:

Financial Services Authority (FSA) website

Modification by consent of MCOB rules for Open Market Homebuy KFIs
FSA modifications to MCOB rules to accommodate the Government backed Open Market HomeBuy product
FSA explanation on how to report HomeBuy products in returns to the FSA (external link)
link to business FAQs page
FSA Factsheet - Open Market HomeBuy Scheme (external link)
link to the consumer leaflet for the Government backed Open Market HomeBuy product

Housing Corporation website

Model leases for housing association use from April 2008 (external link)
link to sample legal documentation

A summary of the FSA's view on the Capital Weighting Treatment for the Government-backed expanded Open Market HomeBuy equity loan scheme is contained in The Capital Treatment for Open Market Homebuy (external link) of the letter sent by Gerry Cross, Manager, Credit Risk Policy FSA to Mrs Kate Davies, Senior Policy Adviser, Council of Mortgage Lenders on 20 September 2006.

Please note: Although the letter extract was published by Communities and Local Government, the content, findings and recommendations are those of the author and do not necessarily represent the views of the Department.