The shared ownership market is complex for homeowners to understand and lacks key data for proper monitoring, the National Audit Office (NAO) has found.
The NAO cited a lack of market data, high service costs, cascading issues and problems with consumer redress as specific issues.
For example, the audit body found that the Ministry of Housing, Communities and Local Government (MHCLG) requires private registered providers to submit shared ownership data, but that “complete data is often not submitted, and MHCLG does not routinely escalate or enforce cases of non-compliance”.
In another example, the NAO said market data does not provide insight into households’ reasons for giving up shared ownership, or whether any exits are through distressed sales because those who own the property can no longer afford it.
The NAO said there are currently more than 250,000 households in shared ownership homes in England, up from 202,000 in 2020.
Overall, the MHCLG does not fully understand customer journeys and experience, the NAO said, although improvements have been made.
The auditor also indicated that redress is a potential issue, adding that shared owners may not be aware of all the redress and advice options available to them.
Similarly, service charges can be unclear, the NAO said, and can be difficult for shared owners to dispute.
The accountant gave the example of one shared owner who saw service costs increase by 170% in two years, while another owner saw a 39% increase in two years, to £4,589 per year.
A large part of the shared ownership issues overlap with those of leaseholders, the NAO said, as all shared ownership is leasehold.
The NAO added that there is hope on the horizon in the form of the Leasehold and Freehold Reform Act 2024, which aims to address issues such as transparency over service charges and the ability to renew leases.