L&Q, one of the UK’s largest housing associations, has called on the government to raise the shared ownership income cap for families with children in London from £90,000 to £120,000 (initially featured in the Times).
The social landlord warns that the current threshold doesn’t reflect the significantly higher housing and childcare costs faced by families with children in London, leaving many locked out of both shared ownership and the open market.
These affordability pressures are increasingly forcing families to leave London altogether, contributing to falling primary school enrolment and school closures in some parts of the capital.
New analysis reveals that a single parent earning just over £90,000 would need an estimated 131 years to save for a typical housing deposit in inner London. Lifting the shared ownership income cap to £120k would open up an alternative pathway into homeownership for London-based families with children.
Key findings reveal how family costs can dramatically affect affordability across London households.
Dual income households (no children)
A couple earning just over £90,000 can save for a 10% deposit on a two-bedroom flat in inner London in around 4.5 years, and 3 years in outer London.
Families with children
Simply factoring in the cost of raising one child (excluding childcare) increases the time needed for a dual-income household to save for a similar deposit from 4.5 years to 12 years.
Single parents
With childcare and living costs shouldered by a single income, and more income exposed to higher tax rates, a parent earning just over £90,000 would take 131 years to save for an open-market deposit in inner London. Expanding shared ownership eligibility up to £120,000 would open up a realistic route onto the property ladder for these households.
Increasing the ceiling for families in London with children would also:
Help families remain in the neighbourhoods where they live, work, study and have support networks. Over the past five years, nine of the ten local authorities with the largest primary school enrolment drops were in London, a trend exacerbated by families being priced out of their local areas.
Keep housing costs sustainable, ensuring shared owners can comfortably manage long-term housing expenses alongside family costs.
Improve market mobility by expanding the buyer pool for existing shared owners looking to sell and move up the ladder. Resident workshops highlighted concern among some people that restrictive income requirements can make selling more difficult.
L&Q is encouraging the government to adopt the proposal, describing it as a practical reform that could be implemented quickly without adding pressure to public finances.
The proposal forms part of an upcoming L&Q report exploring how to create a shared ownership model that is fairer, more sustainable and better serves the people it is intended to help.
Fiona Fletcher-Smith, Group Chief Executive of L&Q said: “Shared ownership is not the answer to every housing challenge, but for many thousands of households, it remains one of the only routes into homeownership.
London’s parents face some of the highest housing and childcare costs in the country. Too many are being squeezed into a gap where they earn too much to qualify for shared ownership, but not enough to buy outright. While a couple making just over £90,000 can save for a deposit in just a few years, some single parents on a similar income could be waiting more than a century.
Raising the cap is a cost-free change that would put homeownership within reach for London parents without access to the bank of mum and dad. We stand ready to work with government and partners across the sector to ensure shared ownership continues to support the households it was designed to help.”
Mei, 50, a single parent and shared owner in Walthamstow, said: “Buying on the open market was out of the question. Working in the public sector, my salary is decent, but nowhere near enough to secure a mortgage on a London property. With shared ownership, I don’t have the constant worry of being asked to move at short notice because a landlord has decided to sell up.”
The wider report draws on L&Q’s policy analysis and a separate systems-thinking study conducted by King’s College London, including workshops with residents and housing sector professionals to identify systemic issues and explore possible interventions. Combined with quantitative data from L&Q, the research aims to help build a robust evidence base exploring how shared ownership can evolve to better serve the needs of current and future residents. The full report and complete set of policy recommendations will be published in October.