News: Low cost home ownership schemes could improve

According to a report from the National Audit Office, better targeting of assistance and more efficient administration could help more than 4,000 additional households get onto the housing ladder each year.

Getting on the housing ladder is becoming more difficult: only 36% of new households can afford to buy compared to 46% in the late 1980s; and, since 1999, the ratio of average house prices to average income for first time buyers has risen by 50%.

Government assistance has helped social tenants, key workers and other priority groups who would have been unable to afford a home without help.

Since 1999, low cost home ownership assistance has helped 40,000 people to buy their properties and the government has made a commitment to help an extra 100,000 households into home ownership by 2010.

But demand for assistance far exceeds supply. In 2004-05, 11,000 households received assistance through government funded programmes, compared to estimated demand of 60,000 households a year.

The National Audit Office says more people could be helped if the schemes saved money by:

  • Targeting social tenants - could potentially generate savings of £48 million by freeing up existing social rented accommodation.
  • Encouraging buyers to take on a larger stake in the property, which could generate £63 million per annum.
  • Ensuring repayment of loans by key workers who left their jobs, saving a further £1 million per annum.

Sir John Bourn, head of the NAO, said: "Low cost home ownership assistance has helped thousands to take their first step onto the housing ladder. But, to ensure that as many other households as possible get the chance to do the same, the assistance needs to be more tightly managed and better focused on those it would benefit most."

"The Department for Communities and Local Government, the Housing Corporation and Registered Social Landlords must work together to ensure that the assistance is being effectively managed and monitored. This will be particularly important in securing value for money as the schemes expand to try to help an extra 100,000 households."

Back to: News Index