The organisation has suggested that shared ownership schemes, which allow owners to increase or decrease the percentage of property they own should their personal financial situation improve or worsen, would help many avoid repossession. This could be achieved by allowing people to ‘staircase up’ – buy more shares in a property, or ‘staircase down’ – reduce their shares in a property, by releasing equity from the property should repayments become a struggle.
While flexible tenure can be operated by all housing associations in line with guidance from the Housing Corporation, it has not been widely taken up, despite having received a high level recommendation from the Inquiry into Low Cost Home Ownership in 2002. With recent figures from the CML revealing that repossessions reached 17,000 during 2006, and another interest rate rise predicted, the Joseph Rowntree Foundation has warned the most vulnerable are those marginal buyers who get onto the property ladder through low cost home initiatives, such as shared ownership.
Martin Wade, director at Mortgage Options, said: “Anything that helps with flexible home ownership is a positive, so long as owners do not flitter away their equity.
There is still a slight stigma about shared ownership, but there shouldn’t be. Owning half of your home is better than owning none.”
