Shared Ownership Now More Affordable than Help to Buy

An independent think tank, the Resolution Foundation. claims that the major expansion of newly-built shared ownership could help low and modest income working families across the country onto the property ladder.

The report, 'One Foot on the Ladder,' shows that shared ownership is affordable for a couple with 1 child on £22,000 in 87% of local authorities in Britain, assuming they spend no more than 35% of their net income on housing costs.

The Resolution Foundation report also shows that the latest phase of Help to Buy is really geared towards households on middle and higher incomes whose main barrier to home ownership is raising a large deposit rather than meeting high monthly mortgage costs.

For low and modest income working families, while it is the case that Help to Buy greatly reduces the time it take to save for a deposit in most local authorities, the policy still leaves monthly mortgage costs unaffordable across the great majority of the country.

This seems good news coupled with reports that the UK is in sustained recovery and does not face major inflation risks, Bank of England policymakers have said.

Minutes from the Monetary Policy Committee's November meeting showed the 9 members all voted to leave interest rates at 0.5%.

The committee also signaled that it was in no rush to raise interest rates and might not do so immediately even after unemployment had fallen to 7%.

Last week, the bank said unemployment could fall faster than predicted. The committee said there were uncertainties over the "durability" of the recovery. It also said there were few signs that expectation of higher inflation were feeding into wage increases.

The Bank of England said: "There could be a case for not raising Bank Rate immediately when the 7% unemployment threshold was reached."