SHARED ownership could help thousands more home buyers in the UK to get onto the housing ladder, but research has found that this growing lending sector is under used and misunderstood.
With house prices rising at a faster rate than most salaries and people continuing to struggle to get onto the property ladder, shared ownership is a potential solution for many, yet is often overlooked despite having been introduced 30 years ago.
The research from the Leeds Building Society has identified a number of key myths around shared ownership including the belief that a shared ownership mortgage is more difficult to place than an ordinary mortgage.
It also found people think shared ownership properties are in less desirable areas, that it is more expensive than renting, that it is difficult to qualify unless you are on a very low wage, or a key worker and that it is like a consolation prize and not real ownership.
“In a nutshell, the lack of understanding around shared ownership boils down to these five distinct points,” said Louisa Sedgwick, head of intermediary distribution for Leeds Building Society.
“In reality, these beliefs are inaccurate and there is an abundance of information for intermediaries, and the borrowers they serve, available from housing associations, the Government and lenders to help them understand how shared ownership could work for them.”
She pointed out that while many housing developers or associations are linked to specific intermediaries in certain areas, there is nothing to stop individuals approaching their own broker about shared ownership.
“At this stage, many clients will have been assessed, certainly in terms of eligibility for shared ownership, by the relevant Housing Association before going to consult an intermediary, meaning the process for the broker can actually be fairly straightforward since they only need to place the mortgage,”Sedgwick said.
A mistaken public perception exists that shared ownership homes may be badly maintained, she said, in poor quality properties in poor, or less desirable, areas.
“Properties available through the scheme can be found in prestigious and sought after areas such as Notting Hill,” Sedgwick. “What’s more, the availability of shared ownership properties extends far beyond London to desirable areas across the UK including Harrogate, Chester and York.”
Shared ownership schemes are found across the UK as house builders are often obliged to include a proportion of affordable housing, some of which will be for shared ownership, regardless of where they are developing, she added.
In terms of cost she explained that while many believe the monthly payments required to live in a shared ownership property hover somewhere between those paid for a full mortgage and rent, in reality, monthly payments for shared ownership properties could be lower than either full ownership or private renting.