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Internal emails reveal MHCLG ‘taken aback’ and Homes England ‘unimpressed’ by critical shared ownership inquiry report
The Ministry of Housing, Communities and Local Government (MHCLG) and Homes England were left “taken aback” and “unimpressed” by an MP-led inquiry into shared ownership, according to internal emails.
The response emerged after a Freedom of Information (FOI) request, shared with Inside Housing, was made to the Greater London Authority (GLA).
The FOI asked the GLA for “discussions, emails or read-outs of meetings between the GLA and MHCLG where findings and/or recommendations in the House of Commons Committee for Levelling-Up, Housing and Communities inquiry report into shared ownership affordability were discussed”.
It revealed senior housing officers at the GLA discussing the response of MHCLG and Homes England in the week after the report came out at the start of April this year.
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One email on the 2 April lists the following bullet points:
- “DLUHC flagged the committee report published last Thursday”
- “I haven’t had a chance to read it yet, but the report highlights the main issue for shared owners being ‘uncapped service charges’”
- “DLUHC said they were taken aback by how critical the committee’s report was, and that they’ll need to provide their final response by end of May”
- “I said we would work with Homes England to understand which proposals from the committee should be taken forward”
MHCLG was the Department for Levelling Up, Housing and Communities (DLUHC) under the previous government.
An email in response one day later showed DLUHC told Homes England not to delay the publication of the revised affordability guidance by attempting to address the recommendations in the committee report.
It said: “Agree it would be difficult for us to not align with whatever Homes England accept. Both [redacted] and HE [Homes England] were unimpressed by the recommendations but appreciate it’s not necessarily their decision to take.
“I’m looking at the recommendations from the report now. From my conversation yesterday, Homes England seem to be looking to create a ‘budget planner’ as opposed to a calculator as a means of moving responsibility for assessing affordability away from the provider and Homes England, and towards mortgage advisors.
“There was no mention yesterday of the ‘budget planner’ providing a long-term assessment of shared ownership affordability nor an applicant’s ability to staircase, which makes sense given they want to move responsibility onto advisors.”
The inquiry, published at the end of March, called for “urgent” reforms to shared ownership after an inquiry found uncapped service charges, rising rents and unfair maintenance costs mean it is unaffordable.
The Levelling Up, Housing and Communities (LUHC) Committee found that shared ownership was supposed to be an “affordable route to homeownership”, but has “failed to deliver on this for too many people, for too long”.
It said the government should explore how to improve lease terms for shared owners by making sure they are only liable for repairs and maintenance costs proportionate to the size of their stake in the property, as part of a broader package of reform to the scheme.
Another internal email after the report revealed discussions around affordability and the issue of providers buying back shares in properties where the shared owners are finding it difficult to sell due to remediation work.
It read: “Thanks, interesting to see. Did HE mention if they were also taking the select committee’s recent recommendations into account when looking at their affordability guidance? (It has some that directly reference it). The report is already on [redacted] radar and he thinks that where recommendations have been made for HE, we’ll either have to also accept them or have a good reason why not.
“Can you share the intel on buy backs with [redacted] too please, as she’s looking at what an appropriate grant level may be. And you’ll see when you read the committee report that they also go hard on buy backs.”
The LUHC report called on the government to either require providers to buy back shares from shared owners in situations where they are trapped and unable to sell shares due to building remediation issues or if not, set out the reasons why it has decided not to do this.
It should also undertake an assessment of the potential merits of requiring provider buyback of shares as an automatic entitlement for shared owners. If this were to be implemented, the government would need to increase grant funding to providers to cover the additional costs incurred.
The new government has yet to respond to the inquiry report. An MHCLG spokesperson said: “The full response to the committee report on shared ownership was published earlier this year under the previous government.
“This government accepts there are challenges that shared ownership has brought and we will carefully consider the issue as part of our work to help people onto the housing ladder.”
Homes England declined to add anything further, and GLA is yet to respond to a request for comment.
