Shared ownership schemes contain pitfalls that buyers often fail to understand, a major independent watchdog warns.

The National Audit Office (NAO) says shared ownership is complicated and exposes buyers to financial risks they are unaware of.

“Shared ownership is a complex part-buy, part-rent model, not always fully understood by those who enter it.

Complexities with shared ownership mean customers can get caught out.”

“Complexities with shared ownership mean customers can get caught out by issues such as increasing service charges,” the NAO says.

And “limited Government data means it’s difficult to assess the scheme’s overall performance”.

A NAO report finds that since the closure of the Help to Buy scheme and the introduction of new restrictions on Right to Buy, shared ownership is now the largest Government supported home ownership scheme.

Rising costs

The annual delivery of new shared ownership homes has increased in the past decade from 11,128 homes in 2014-15 to 20,353 homes in 2024-25, and last year made up 11% of the supply of all new build homes.

Customers report concerns with rising costs such as increased service charges over time, along with transaction costs that apply each time shared owners want to buy a bigger portion of their property.

The implementation of the Renters’ Rights Act, the Social and Affordable Homes Programme and changes to leasehold are designed to improve the experience of shared owners, but also add to the complex picture, the NAO says.

Weaknesses

Gareth Davies, Head of the NAO, says: “Shared ownership remains an important route into home ownership, but it is complex, and weaknesses in information, affordability, data quality and redress mean that government does not yet have a full understanding of how the model works for consumers.”

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