The term 'shared ownership' is acting as a barrier to the very borrowers it is designed to help
Shared ownership should be rebranded to attract the borrowers it is designed to help, according to broker firm Just Mortgages.
The brokerage believes that the term ‘shared ownership’ is acting as a barrier to its target customers, with feedback from across their broker network stating that clients regularly misunderstand who the scheme is targeted at and what the term really means.
Just Mortgages says it is also aware of many other misconceptions around shared ownership concerning what properties would be acceptable, what rates are available, and how long the process may take.
Shared ownership – often cited as one of the better alternatives to first-time homebuyers at the end of Help to Buy – is also positioned as a vehicle for those without a deposit, but it can also be appropriate in those situations where relationships break down. In this situation, it often results in one partner leaving a family home without a deposit at their disposal but an income and salary that could happily support a mortgage payment.
Just Mortgages said that this is one emerging group of borrowers that shared ownership could help but is often left off the agenda as the name suggests it might not be suitable for that borrower.
“We get tremendous feedback from across our broker network about all mortgage types, and there is clearly an issue to be addressed with shared ownership,” John Phillips (pictured), national operations director at Just Mortgages, commented. “Recent anecdotal feedback from some younger borrowers revealed that they actually thought shared ownership meant sharing the property and not living on their own.
“Those who are slightly longer in the tooth may be tempted to scoff at this, but our market is full of jargon and terminology that is completely unfamiliar with a new generation of borrowers and people with new borrowing requirements.”
Phillips added that he was worried that the terrific opportunity shared ownership provides to help people get on the property ladder is being diminished through “clumsy terminology.”
“Shared deposit scheme, low deposit scheme, and deposit deferral scheme are just some examples of terms that would position the product in a more appropriate light,” he stated. “I think any re-branding or re-positioning would benefit the whole industry and we would welcome the involvement of lender and broker trade bodies to support this.”
Maximising the opportunities of shared ownership will be one of the topics of discussion at Just Mortgages’ upcoming New Build and Affordable Housing event, taking place in Central London on April 19, 2023. The all-day event will bring together key industry figures from across lenders and both housing and trade associations to discuss the latest developments and future prospects of new-build and affordable housing. Industry professionals can register for the event online.
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