Low Cost Home Ownership Schemes (LCOH) have face significant challenges since the recession, but are a vital part of the housing market, a new review of affordable housing by Halifax demonstrates.

Since 2007/08 there have been almost 45,000 new homes built under various LCHO schemes. In 2009/10 new LCOH homes represented around 13% of total private enterprise and Housing Association sales – an increase from the 8% recorded in 2006/07 before the financial crisis began.

LCHO, which includes schemes as shared equity and shared ownership, has been promoted by past and present governments as a means to enter into home ownership for families and individuals who cannot afford to purchase on the open market without assistance. The Halifax review shows that shared ownership and shared equity are by far the most popular LCHO schemes for buyers, accounting for 87% of total sector transactions.


Since the start of the recession many of the schemes have been designed as an incentive for house builders to invest in new home provision as well as to help buyers with affordability. While seven out of ten LCHO buyers are in full-time employment, average annual gross earnings stood at just £23,502 for LCHO buyers in 2009/10.

Nitesh Patel, Housing Economist at Halifax, said: "The LCHO sector is small, but it is very important as it brings together builders, buyers, mortgage lenders and the government in helping some buyers onto the housing ladder.

"The sector has not been immune to the difficulties of an uncertain housing market, and there is still much work to do. However, schemes such as FirstBuy should have a positive impact, and we support efforts such as these to ensure that affordable housing is readily available."

(CD)