Special report: growth in shared ownership sales slows to five-year low

Richard Donnell, executive director of research at property website Zoopla, says: “This is a tale of the housing market and availability of new homes and affordability overall. Our own data shows first-time buyers are looking to buy cheaper homes than a year ago as affordability remains a constraint on price inflation. This will impact first-tranche sales on the consumer demand side, as well as the supply/availability side.”

Shared ownership homes are more affordable outside London and the South of England, and buyers have greater borrowing capacity, Mr Donnell adds.

“First-time buyers in the Midlands and North of England are paying more for their homes than a year ago by three to five per cent due to greater borrowing capacity from eased affordability rules,” he says. “This is supporting more first-tranche sales, notwithstanding some viability challenges that may impact the availability of shared ownership homes for sale.”

Sarah Robson, director of development and asset management at Karbon Homes, says there has been huge demand from a diverse range of customers for its new build shared ownership homes over the past year in the North East and Yorkshire, where it operates. The Newcastle-based landlord has also seen “very high demand” for Rent to Buy, which allows tenants to become shared owners of their rented homes, Ms Robson adds.

“We’re seeing a diverse mix of customers coming to us showing interest in shared ownership,” Ms Robson tells Social Housing. “It’s no longer just first-time buyers wanting to take that step, but we are now seeing people choosing shared ownership to allow them to buy a home that meets their needs, rather than one that just meets their level of affordability.

“We’re also big advocates of the Rent to Buy scheme. We developed 228 Rent to Buy homes across our geography. This product really works for us and the demand we see for it is very high.”

Stuart Hensby, director of sales and marketing at Abri, which operates across the South of England, said the surge in shared ownership sales in the South West in 2021-22 had been hit by interest rate hikes, nutrient neutrality rules and a growing divide between build costs and revenue.

“We grew from 100 units of shared ownership in 2019-20 to over 500 by the end of this year. 2022 was very much the year that nutrient neutrality hit. That has now eased off and we’ve got sites which are moving through the planning system in that neck of the woods, which is positive,” Mr Hensby says.

The past three years’ average growth in first-tranche sales of just 2.8 per cent in the South West also reflected market challenges such as build cost inflation and rising mortgage rates, Mr Hensby adds.

“The last couple of years have been frustratingly flat. One of the big challenges we and all developers have found is that build cost inflation has been huge over the last three years and we haven’t had the revenue growth you normally see in the development market,” he says.

“Historically those two things work together in tandem to a degree, protecting finances and appraisals. But we’ve been working in an environment where the costs are going up but the revenue hasn’t, and that is a bit unsettling.”

One knock-on effect of the challenging affordability in some regions, revealed in the analysis, is a surge in staircasing sales – whereby existing shared owners increase their equity share in their homes. Private registered providers made 4,713 staircasing sales in 2024-25, a 34.5 per cent increase on the previous year and a big swing forward from the 7.8 per cent drop in 2022-23, the last year on which we reported.

Housing associations say staircasing had been rendered financially attractive by falling mortgage rates and above-average rent rises, linked to high inflation. “We saw an increase in staircasing before 1 April 2025, with many shared owners looking to complete before stamp duty changes came into effect,” Claire Brenlund, sales and marketing director at L&Q, tells Social Housing.

Staircasing trends also vary by region in a mirror image of those seen for first-tranche sales. Associations sold more equity shares through staircasing in London and the South East than in the rest of the other regions combined. Staircasing sales rose by the smallest proportion of 4.8 per cent in the East Midlands, the region that saw the second-biggest proportional rise in first-tranche sales of 17.4 per cent.

Vikki Walker, director of sales and marketing at Southern Housing, says the sharp rise in staircasing as first-tranche sales “barely shifted” suggests that shared owners are “consolidating” their stakes instead of new buyers entering the market.

“This shows a changing picture for shared ownership. While affordability challenges remain for new buyers, wage growth and stabilising interest rates have made staircasing more achievable for many,” Ms Walker adds. “These trends raise important questions about how we adapt our approach and support both new buyers and existing owners in a changing housing market.”

The analysis found that Sage Homes sold the largest number of shared ownership homes last year, by some way. The for-profit provider made 1,794 first-tranche sales in 2024-25, an increase of 208.8 per cent on the previous year, as well as making 22 staircasing sales, compared with zero the previous year. It also reported the largest number of low-cost homeownership homes that were unsold for less than six months – a total of 407.

Sage Homes said its big jump in sales was due to “the success” of Home Stepper, a product it developed with house builders to convert their open market sale homes into shared ownership, which is now largely complete. The number of unsold homes had been planned for and reflected an increase in its activity in London in 2024-25. The rise in staircasing reflects a “maturing” of Sage Homes properties, most of which are only five years old.

David Orchin, sales director at Sage Homes, tells Social Housing that shared ownership continues to be “in high demand” from purchasers unable to buy homes outright.

“We are extremely proud to be the largest provider of new shared ownership homes last year, supporting hundreds of first-time buyers, and also England’s largest provider of new affordable homes for the last five years, demonstrating our ability to deliver high-quality new homes for people who need them,” he says.

L&Q reported the second-highest number of shared ownership sales of 863 homes in 2024-25, although this was a fall from 1,032 in the previous year. The London-based landlord also reported the highest number of staircasing sales of 413, a 25.2 per cent jump on the previous year, and the most low-cost homeownership homes unsold for more than six months.

L&Q’s Ms Brenlund says the 2024-25 falls were due to particularly high delivery in the preceding two years.

“The number of homes sold in 2024-25 is closer to our longer-term average,” she adds. “Our first-tranche sale figures are in line with national trends where we have seen stronger demand in the North West compared to London, where there has been less activity. Higher mortgage rates and cost of living increases have had a comparatively bigger impact on the more expensive markets in London and the South East.”

Homes unsold for more than six months were “actively targeted” to ensure they were sold “as quickly as possible”, she adds.

Clarion Housing Group had the third-largest number of first-tranche sales of 781. It also had the second-largest number of low-cost homeownership homes unsold over six months. Clarion declined to comment.

Southern Housing saw the second-biggest rise in first-tranche sales to 366 in 2024-25, an increase of 177.3 per cent on the previous year. Its staircasing sales rose to 164, or 33.3 per cent over the same period. The Kent-based landlord also had the third-highest number of low-cost homeownership homes that were unsold for less than six months.

Southern’s Ms Walker says the growth reflects the combined delivery of Optivo and Southern Housing, from whose merger the association was formed. “This also includes several larger developments and high-rise schemes,” she adds.

Its relatively large number of unsold homes reflects the number of handovers that took place late in the final quarter of 2024-25.

Sparrow Shared Ownership had the biggest fall in first-tranche sales in 2025, but this was down to the sale of the business by Sage Homes to the pension fund Universities Superannuation Scheme in August 2024.

A spokesperson for Sparrow says: “Sparrow became a standalone shared ownership provider part-way through 2024, and that transition is the reason for the decrease you’ve highlighted.”

Peabody saw the second-biggest fall in shared ownership sales of 386 homes, or 87.9 per cent, and the largest rise in staircasing sales, which were up from 220 the previous year to 335 in 2024-25.

A spokesperson for the G15 association says: “Sales were lower in 2024-25 because fewer new schemes reached the point of sale as part of the normal development cycle, but we expect to see an increase in shared ownership sales as homes come forward in 2025-26.

“We saw a strong rise in existing shared owners choosing to buy bigger shares in their homes – often all the way to full ownership.” Peabody has also seen an increase in the number of its existing shared owners reselling their properties.

Sovereign Network Group (SNG) had the third-largest fall in shared ownership sales of 216 homes, or 32.3 per cent, to 453, but it remains among the top 20 sellers. SNG says its internal figures showed that it sold 687 shared ownership homes in 2024-25. “This is broadly in line with the previous year, generating £90m for direct investment in building new homes and improving existing ones.”

The analysis also pinpoints the local authority areas with the highest first-tranche and staircasing sales and those where these markets appear to be rising and falling.

As mentioned, the largest number of sales, of 317, were in North Yorkshire. This is followed by 308 in Central Bedfordshire in the East of England. Despite the declining market in London, five London boroughs appear in the top 20 authorities for first-tranche sales: Newham, Ealing, Haringey, Tower Hamlets and Wandsworth. London boroughs also took 13 of the 20 top slots for staircasing sales, with 164 made in Tower Hamlets in 2024-25.

First-tranche sales fell furthest in Wiltshire, Milton Keynes and Bedford and rose most in Thurrock, Hackney and Canterbury. Staircasing sales fell furthest in Brent, Broxtowe and Oldham and rose most in Tower Hamlets, Islington and Central Bedfordshire.

Looking forward, housing associations point to continued “strong” demand for shared ownership, including in London and the South East, where affordability is under “growing pressure”.

“Demand for shared ownership homes remains strong across all the areas that we work in,” says L&Q’s Ms Brenlund. “With challenges around affordability and the supply of private rented homes falling, we expect that demand for shared ownership will only become stronger. Shared ownership is an essential part of housing delivery as it offers a route to homeownership for those who cannot afford to buy outright.”

Southern Housing’s Ms Walker says: “Balancing supply and demand will remain a challenge, especially where affordability and location are key.”

A spokesperson for SNG says the uncertain economic climate and rising delivery costs are making bringing forward supply “increasingly challenging”.

“Shared ownership remains in demand, particularly across London and the South, but affordability is under growing pressure. Living costs and private rents continue to rise, making it harder for working households to take that first step, even where households earn more than the income cap,” they add.

Abri’s Mr Hensby says the association has seen “high levels of interest” from potential shared ownership buyers in recent weeks.

“It was challenging in the run-up to the end of the year. Buyers appeared to be ‘sitting on their hands’ to see what the late-November Autumn Budget would bring,” he adds. “There is always a bit of a New Year’s jump, but it definitely feels like we’re getting some good interest from our campaign work and seeing that slowly start to convert. Mortgage rates are getting more favourable. It feels like things might be heading in the right direction.”

Abri and L&Q also point to the need to address negative perceptions about shared ownership homes as they push forward in 2026, including by signing up to a new Shared Ownership Code.

“It’s essential that shared ownership remains attractive for residents,” says Ms Brenlund. “At L&Q, we’re proud to be backing the Shared Ownership Code, which will raise standards of transparency, fairness and consistency for the benefit of both new and existing shared owners.”

With strong demand for shared ownership from consumers, and the government’s focus on accelerating supply, there will be pressure on providers to shake free of the subdued growth in sales in recent years. It is a pressure that can only be greater on providers in high-cost regions, such as London and the South East, where the market is shrinking instead of accelerating. It looks set to be a challenging 2026.

Click on the button below to download the data tables for ‘Special report: shared ownership sales 2025’

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