Gresham House
Specialist asset management
Addressing the demand for affordable homeownership
Addressing the demand for affordable homeownership
Shared ownership provides an affordable route to homeownership for middle and lower-income households through a part-buy, part-rent model with subsidised rents and low deposit requirements.
For many people, Shared Ownership can provide a stepping-stone out of renting and onto the property ladder. There are c.240,000 shared ownership homes across England1, and around 20,000 new shared ownership homes are delivered annually2, making it one of the faster growing housing tenures. Despite volatility in both the economic and political environment the need for high-quality affordable housing continues to increase.
“The scale of the UK’s housing challenge clearly cannot be met by the public sector alone, and long-term, patient private capital can make a tangible difference to the overall supply of UK housing”
Tony Dalwood, CEO Gresham House
Government–backed initiative
As part of the Government’s £12bn five-year government grant programme, over £30,000 of government subsidy is received for each new shared ownership home we deliver via each of our Registered Providers, our wholly owned for-profit registered providers of social housing. This allows us to provide below-market rents to shared ownership residents compared to private rented housing.3
Our Partnership with Thriving Investments
Gresham House and Thriving Investments (“TI”), the UK housing focused fund manager within the Places for People Group, have launched a partnership for the delivery of affordable homes.
The partnership creates a leading shared ownership fund management platform, providing a dedicated solution for investors seeking exposure to shared ownership investment.
Partnership highlights:
- Strength and depth of a larger combined investment team
- Access to extensive PfP proprietary pipeline
- Enhanced ability to offer local solutions to LPs
Find out about the Partnership with Thriving Investments here
Social and environment impact
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Affordability The part-buy part-buy model reduces deposit and income requirements. Shared ownership makes homeownership accessible to an additional 8.2mn3 people each year who would otherwise be unable to get a foot on the property ladder.4 |
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Security of tenure It allows residents to invest and work towards full ownership without overstretching themselves. Shared owners can also purchase an increased share in their property (known as ‘staircasing’), meaning they save on rent and can own more of their home over time. |
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Environmental Deliver new homes that are highly energy efficient, both reducing carbon emissions and reducing resident energy bills. |
Gresham House’s unique proprietary shared ownership Customer and Environmental Charters support residents and helps to deliver a social impact.
Best practice in Shared Ownership housingHow does shared ownership work?
| The shared owner: | |
| 1. | Purchases an equity stake in their new home at open market value. This is known as the “first tranche sale” and is a minimum of 25% and up to 75% of the value of the property |
| 2. | Pays a subsidised rent c.30% below market rent4 on the remaining part of the home, which increases annually at CPI+1% |
| 3. | Typically finances their initial stake with a 90% mortgage |
| 4. | Is responsible for maintenance, repair and insurance, creating strong alignment of interest |
| 5. | Has the option to incrementally purchase additional shares in their home at the prevailing open market value (known as “staircasing”) |
Why invest in shared ownership with Gresham House?
Our aim is to deliver affordable, high-quality, safe homes, with great customer service and long-term stability of tenure for residents.
We are focused on accelerating the development of socially and economically beneficial affordable housing in the UK. We are a long-term investment partner that works with housing developers to help meet this demand.
Key differentiators:
- Our Registered Providers of social housing, ReSI Housing Ltd. and ReSI Home Ltd., are solely focused on Shared Ownership housing and free from the conflicts faced by most Housing Associations whose main activities relate to the provision of general needs and affordable rental housing
- We will target delivering new homes to EPC A where possible, with a minimum of EPC B
- We ensure that service charges are reasonable and are being used as intended to maintain the quality of the properties
- We will not charge shared owners ground rents on new homes that we develop
- We do not charge our shared owners additional administrative fees
- We provide shared owners with the option sell their home on the open market from day one if they wish
How does the fund support shared ownership?
Our funds are investment and strategic partners of Homes England and the Greater London Authority for the delivery of new affordable homes. They each provide financial grants for every new home and support our vision to improve communities and deliver homes that create a balanced social impact.
Chart assumptions: Initial Property OMV £300k; first tranche sale percentage 25%; initial mortgage LTV 90%; mortgage term 30 years; mortgage interest 4.5%; service charge £1,250 p.a.; shared ownership management fee £250p.a. shared ownership rent 2.75%; maximum housing costs as a percentage of net income 40%
1. ONS – RP Social Housing stock and rents in England 2023
2. ONS – Affordable Housing Supply in England, 2023
3. ONS – gov.uk – Percentile points for total income before and after tax, for tax year 1992 to 1993 to tax year 2020 to 2021. Assumes average of 1.5 earners per household
4. Comparison of shared ownership rent on retained equity of 2.75% and service charge of £1,500 p.a. compared to typical market rental yield of 5%
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