Shared ownership doesn't help most young people onto the housing market

You need to be pretty lucky to make the most of it.

Bad news, fellow young people hoping to own a house: "shared ownership" is kinda crummy.

The dream behind shared ownership is that you, penniless young person who might just be able to save a deposit by 2050 assuming you don't do anything silly like have a social life or go on holiday, only buy part of the property, usually around a quarter or a third. That partial purchase reduces the amount of cash you have to stump up for a deposit, and you then split your monthly outgoings between paying rent on the three quarters you don't own, and paying down the mortgage on the quarter you do own.

If (hopefully, when) you pay off the mortgage on the first chunk of the house, you can increase your share, and start the whole thing again. Eventually, you own the whole house. Congratulations!

Except it doesn't tend to work as well as that, as the Guardian's Liam Kelly reports:

As Giles Peaker, editor of the Nearly Legal housing law blog, wrote on the Guardian Housing Network this week, there is no such thing as shared ownership. Rather than a way on to the housing ladder, shared ownership was, he said, "just a tenancy, with an expensive downpayment for an option to buy the whole property at a later date".

One shared owner found this out the hard way when, after falling behind on her rent, she was evicted from her part-owned property and a court ruled she had no right to the £30,000 she had already paid for her share.

Kelly describes a litany of problems with the scheme, which tends to end up combining the worst aspects of homeownership and renting. Tenants are tied down to one property, responsible for keeping it repaired and maintained, and need to pay a much larger deposit to secure it; but at the same time, they aren't insulated from rent rises or jumps in service charges, and the bulk of the money they pay each month isn't building equity for anyone other than the developer's shareholders.

On top of that, there's problems unique to shared-equity. The market for second-hand part-owned homes it particularly illiquid, so good luck selling your share for anything like what you spent on it.

If everything goes well, you may be the one in five who actually ends up taking full ownership of their house. If it doesn't… you won't.

 

Flat-hunting. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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After Article 50 is triggered, what happens next?

The UK must prepare for years, if not decades, of negotiating. 

Back in June, when Europe woke to the news of Brexit, the response was muted. “When I first emerged from my haze to go to the European Parliament there was a big sign saying ‘We will miss you’, which was sweet,” Labour MEP Seb Dance remembered at a European Commission event. “The German car industry said we don’t want any disruption of trade.”

But according to Dance – best known for holding up a “He’s Lying” sign behind Nigel Farage’s head – the mood has hardened with the passing months.

The UK is seen as demanding. The Prime Minister’s repeated refusal to guarantee EU citizens’ rights is viewed as toxic. The German car manufacturers now say the EU is more important than British trade. “I am afraid that bonhomie has evaporated,” Dance said. 

On 31 March the UK will trigger Article 50. Doing so will end our period of national soul-searching and begin the formal process of divorce. So what next?

The European Parliament will have its say

In the EU, just as in the UK, the European Parliament will not be the lead negotiator. But it is nevertheless very powerful, because MEPs can vote on the final Brexit deal, and wield, in effect, a veto.

The Parliament’s chief negotiator is Guy Verhofstadt, a committed European who has previously given Remoaners hope with a plan to offer them EU passports. Expect them to tune in en masse to watch when this idea is revived in April (it’s unlikely to succeed, but MEPs want to discuss the principle). 

After Article 50 is triggered, Dance expects MEPs to draw up a resolution setting out its red lines in the Brexit negotiations, and present this to the European Commission.

The European Commission will spearhead negotiations

Although the Parliament may provide the most drama, it is the European Commission, which manages the day-to-day business of the EU, which will lead negotiations. The EU’s chief negotiator is Michel Barnier. 

Barnier is a member of the pan-EU European People’s Party, like Jean-Claude Juncker and German Chancellor Angela Merkel. He has said of the negotiations: “We are ready. Keep calm and negotiate.”

This will be a “deal” of two halves

The Brexit divorce is expected to take 16 to 18 months from March (although this is simply guesswork), which could mean Britain officially Brexits at the start of 2019.

But here’s the thing. The divorce is likely to focus on settling up bills and – hopefully – agreeing a transitional arrangement. This is because the real deal that will shape Britain’s future outside the EU is the trade deal. And there’s no deadline on that. 

As Dance put it: “The duration of that trade agreement will exceed the life of the current Parliament, and might exceed the life of the next as well.”

The trade agreement may look a bit like Ceta

The European Parliament has just approved the Comprehensive Economic and Trade Agreement (Ceta) with Canada, a mammoth trade deal which has taken eight years to negotiate. 

One of the main stumbling points in trade deals is agreeing on similar regulatory standards. The UK currently shares regulations with the rest of the UK, so this should speed up the process.

But another obstacle is that national or regional parliaments can vote against a trade deal. In October, the rebellious Belgian region of Wallonia nearly destroyed Ceta. An EU-UK deal would be far more politically sensitive. 

The only way is forward

Lawyers working for the campaign group The People’s Challenge have argued that it will legally be possible for the UK Parliament to revoke Article 50 if the choice is between a terrible deal and no deal at all. 

But other constitutional experts think this is highly unlikely to work – unless a penitent Britain can persuade the rest of the EU to agree to turn back the clock. 

Davor Jancic, who lectures on EU law at Queen Mary University of London, believes Article 50 is irrevocable. 

Jeff King, a professor of law at University College London, is also doubtful, but has this kernel of hope for all the Remainers out there:

“No EU law scholar has suggested that with the agreement of the other 27 member states you cannot allow a member state to withdraw its notice.”

Good luck chanting that at a march. 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.