In this cost of living crisis, shared ownership isn’t the housing lifeline some had hoped

When purchasing a house might seem unattainable for many people, shared ownership offered hope, but with costs going up people are finding themselves in an unaffordable situation, writes Hannah Fearn

For many owning a house is out of reach (Getty)

Timea Szabo knew exactly what she was getting into when she bought a shared ownership flat in south London – or so she thought. She’d been a previous shared owner before, north of the river, and had managed to sell on her stake with ease, even making a small profit. When she moved to Woolwich following a relationship breakdown, Szabo was delighted to discover that the home she’d been renting was in fact a shared ownership property too, and the landlord was now looking to sell his share. She jumped at the opportunity. Now, with the cost of living crisis biting, she wonders if she did the right thing.

“When I bought it, at the end of 2018, the rent and service charge was already £260 a month which was quite steep, but I didn’t want to leave my support network and my son could stay at his nursery. I decided that on balance the benefits of living in that area would outweigh the increased cost,” she says. But since then, Szabo – a single mother who nevertheless earns a good income working in the financial services industry – has faced a triple hit on her earnings. Both the rent she pays and service charges for her building have increased steeply (the latter party because her building is caught up in the cladding scandal), and when she comes to remortgage next year she will face high-interest rates on her borrowing too.

“My [fixed rate] is due to come up next year and shared ownership mortgages are always more expensive,” she explains. “I feel so stupid saying this – I work in financial services and I have a law degree, and I have a good grasp of things – but I never realised it was more expensive. [Banks] do stress tests for mortgage affordability but they never do it for rent, but the rent element is the one that’s guaranteed to go up. On average your mortgage tends to go down over the years, unlike your rent which is always going up.”