New shared ownership code with increased fee transparency set to launch

Ann Santry, chair of the Shared Ownership Council, said: “Our aim is that the code will help raise standards, working in the interests of both customers and providers alike, so we can unlock a better and bigger shared ownership market.

“While the code marks a significant step towards ensuring all those who enter shared ownership have the experience they expect, we understand that it cannot address all the challenges that shared owners face. Broader reforms, including legislative support, remain essential to achieving further lasting improvements in shared ownership.”

As part of the consultation, the industry provided input on refundable fees and discounted service charges.

The resulting code includes requirements around defects, fees, service charges, lease extensions and staff training. It is also underpinned by six principles, which include clarity of information, costs and policies, and how providers deal with service requests and complaints.

The changes increase transparency of fees. All fees charged by a provider will have to be clearly stated upfront and published on its website.

The updated code also aims to improve service-charge transparency and affordability by introducing a service charge information document.

This will require providers to show a range of scenarios for how service charges could evolve, as well as an asset management plan.

Providers will also have to work more closely with freeholders to ensure that service charges are affordable for shared owners.

The code will ask providers to provide lease extensions to customers “up to the housing provider’s interest and to do so at a price that reflects their share of the legal costs only”. This means that where the shared owner’s lease is shorter than the housing provider’s, the housing provider would need to increase the length of the lease to that of its own if asked by the shared owner, at a reasonable share of the legal and administrative costs.

The Shared Ownership Council said it would explore this further in the pilot.

It will also align defects liability periods with industry standards by extending them to 24 months. This will be introduced over time, to allow housing providers to negotiate contracts with developers.

Half of the consumers surveyed agreed the code would improve outcomes for consumers, as did three-quarters of industry respondents.

Only 37 per cent of current and former shared owners reported that they were satisfied with their landlord. This compares with overall satisfaction of 49 per cent among shared ownership residents, according to the Regulator of Social Housing’s tenant satisfaction measures.

Housing providers participating in the pilot programme include housing associations Clarion, L&Q, LiveWest and SNG, as well as for-profit Heylo.

During this phase, the Shared Ownership Council will work with the pilot participants to fine-tune implementation.

The council has called on housing providers interested in the code to get in touch and join the initiative.

When asked if the Shared Ownership Council expected more for-profits to sign up, Ms Santry told Social Housing: “It is an inclusive initiative which looks to bring in adopters from all types of organisations that interact with shared owners, including lenders and intermediaries and, of course, both housing associations and for-profit providers are part of that.

“Heylo and Sage are among two for-profit providers who have been supporters of the code to date, and our aim is for the pilot phase to pave the way for housing associations and for-profits alike to adopt the code at its broader industry launch in spring 2025.”

Paula Higgins, chief executive of The HomeOwners Alliance, and a board member of the Shared Ownership Council, said: “The code is the first step in the journey to make shared ownership better and fairer to all by setting the minimum standard and building on the best practice we know is out there.”

Kate Henderson, chief executive of the National Housing Federation (NHF), said shared ownership was helping thousands of people to get onto the housing ladder. However, she added that she recognised the problems some shared owners have had to face – and the need for the sector, and the market, to respond.

“That’s why the NHF is fully behind this important cross-industry effort to launch a shared ownership code that works in the best interests of shared owners, while supporting the industry to deliver an excellent product that speaks to its purpose of delivering affordable, secure homes for as many people as possible,” Ms Henderson said.

Gavin Smart, chief executive of the Chartered Institute of Housing, said: “The shared ownership code is a very welcome development and will help to give shared owners and potential shared owners confidence that their shared ownership purchase will be well managed and that their ongoing relationship with their shared ownership landlords will be transparent, fair and well run.”

In the new year, the Shared Ownership Council will also look to launch a code for lenders and mortgage intermediaries, alongside further pilots with those organisations.