Low Cost Home Ownership Schemes

Special or Commissioned Report

LSE Consulting Report for the Social Mobility Commission

Bert Provan, Alice Belotti, Laura Lane and Anne Power

Published 3 July 2017

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Low Cost Home Ownership (LCHO) schemes are common in many countries. OECD evidence suggests this is based on the idea that they promote wealth accumulation, better outcomes for children, and higher levels of social capital in neighbourhoods, although none of these is unambiguously evidenced. More important is that it is often seen as a universal household aspiration.

Schemes come in many different forms. These include subsidising the construction of "affordable" homes to buy; or reducing the cost of buying for individual households including through lower deposits, subsidised savings schemes, government guarantees, grants to reduce the price, and the sale of public housing at a discount ("Right to Buy" in the UK).

The research finds that many low-cost home ownership schemes are more likely to benefit better-off buyers and that many schemes are of out of reach to most families on average earnings. This report recommends new actions to help more low-income buyers get on to the housing ladder.