"The pressures facing households today are forcing a growing number of people into more complex financial situations – not because they are irresponsible, but because life has become less linear."
- Rob Barnard, intermediary relationship director at Pepper Money
Shared ownership is playing a critical role in addressing the UK housing crisis, offering a crucial route onto the property ladder for those who would have otherwise been priced out.
‘Shared Ownership – A Vital Bridge to the Housing Market’, commissioned by Pepper Money, has revealed that since the 2008 Financial Crash, more than 3m potential homeowners have missed out on the opportunity to own a home.
The white paper aggregates data from DLUHC & MHCLG, UK Finance, Land Registry, and the Financial Conduct Authority (FCA) to create bespoke modelling that assesses the tenure’s impact on the wider housing landscape.
Exploring the role of specialist lenders, the paper estimates that more than 25 lenders now offer shared ownership mortgages, but the majority focus solely on mainstream products. This leaves a gap for buyers with more complex financial backgrounds.
Inflation, higher interest rates, and a more unpredictable financial landscape have made it harder for people to access traditional mortgage lending. This has led to a rise in demand for shared ownership mortgages from specialist lenders; there has been a 21% increase in shared ownership lending in the last year alone.
In 2023/24, the average shared ownership buyer purchased a 40% stake in a home worth £313.1k, with a deposit of £22.8k and borrowing £99.2k. By comparison, the average first-time buyer (FTB) in England faces a deposit of £68,600 and a mortgage advance of £223k. In London, the deposit gap is even wider, reaching £155k.
“For many people today, the dream of owning a home feels increasingly out of reach. So much so that our paper estimates that 3.3m households have missed out on entering the housing market since the financial crash.
“House prices have soared, wages haven’t kept pace, and the cost of renting makes saving for a deposit harder than ever. That’s where shared ownership comes in, and we believe this should be an option for more people,” explained Rob Barnard, intermediary relationship director at Pepper Money.
He said: The pressures facing households today are forcing a growing number of people into more complex financial situations – not because they are irresponsible, but because life has become less linear. Shared ownership, by its very nature, serves those who are navigating life’s complications with resilience and ambition.
“Our shared ownership borrowers are a case in point. In 2023/24, their average household income was £55k – significantly above the estimated £37k market-wide figure in 2024. Borrowers are older, more likely to buy as couples, and in a strong position to meet their financial commitments even in a high-inflation environment.”
“50% of Pepper Money’s lending last year involved customers with no adverse credit – these are creditworthy customers who simply sit just outside the high street mould. And yet, rigid box-checking would see many of these people turned away. We believe that’s neither fair nor sustainable,” Rob concluded.
