Research finds misconceptions about shared ownership is preventing buyers from taking advantage of the scheme
Just over a third, or 35%, of prospective first-time buyers (FTBs) can accurately define shared ownership, indicating a significant knowledge gap that could hinder many from pursuing this alternative route to home ownership, according to new research from The Mortgage Lender (TML).
The research highlights the challenges FTBs face in getting on the property ladder, with some misconceptions about shared ownership preventing them from taking steps towards their property goals.
The study found that 17% of first-time buyers believed shared ownership meant co-owning with family, 14% thought it involved sharing landlord responsibilities, 8% associated it with owning with a stranger, 7% thought it meant owning with a friend, 14% admitted they didn’t understand it at all, and 5% believed it meant owning a few rooms in a house.
Currently, first-time buyers are facing a particularly tough market, with the Building Societies Association (BSA) reporting that it is the most expensive time for first-time buyers in the last 70 years. The BSA has called for substantial government support to assist first-time buyers.
Despite the need for governmental support, TML’s research suggests that existing mechanisms like shared ownership are not being fully utilised due to a lack of understanding. This gap in knowledge means that potential buyers who could benefit from shared ownership might be missing out.
“No one can be in any doubt as to how difficult it is for first-time buyers at the moment,” said Louise Apollonio (pictured), head of corporate accounts at The Mortgage Lender. “High interest rates, property prices and rising costs have led to a situation where many are losing faith that they will ever be able to get onto the ladder. While evidently there are steps that the government must take to help this group, there is also support and alternative routes to home ownership available that could make a huge difference to many first-time buyers.
“The first hurdle to get onto the ladder is raising a deposit, which is particularly difficult for those renting who are also dealing with steep rental price rises. However, that doesn’t mean that they wouldn’t be good candidates for owning a property. Shared ownership provides an opportunity for first-time buyers to get a step onto the ladder without the need for a huge deposit, allowing them to slowly work up to total ownership of the property.
“We believe that everyone deserves a place that they call home and are committed to ensuring that our lending practices support our end-customers’ real life situations. This is why we recently established our shared ownership proposition, and will be working with our broker partners to help their first-time buyers get that all-important first step onto the ladder.”
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