Copy article

Brokers - what's the shared ownership market like today?

Journalist: John Fitzsimons, Freelance

ended 17. October 2023

Morning brokers

This week the Government brought in some reforms to the ways that rents work in shared ownership (https://www.mortgagesolutions.co.uk/news/2023/10/13/government-reforms-shared-ownership-rents/) so we thought it would be a good time to dig into the market more generally.

In your view, how is the shared ownership market at the moment?

  • Is there demand from buyers? Has it picked up some of the slack from Help to Buy?
  • Do borrowers understand it? How tough is the education role brokers have to play with the scheme?
  • What's the lending situation like? Are enough lenders active in shared ownership, and are the products good enough? Where could improvements be made?
  • What needs to happen for shared ownership to play a bigger role in the mortgage market? Would that even be a good thing?

All thoughts on this one are welcome!

2 responses from the Newspage community

Copy all

Copy

Lee Gathercole
Co-Founder at Rebus Financial Services
There is absolutely a demand for shared ownership, especially for first-time buyers. With property values where they are, even despite recent falls, it's the only real opportunity some first-time buyers have of getting on the ladder, particularly those that are buying on their own. One of the biggest obstacles with the scheme is that many don't understand it as there are a number of factors to take into account, e.g. share percentage, service charge, ground rent and shared ownership rent. It's a bit of a minefield for most and it is generally left to brokers to educate buyers. I do believe more and more banks need to offer shared ownership mortgages, as the competition in the market, particularly for those with lower deposits like 5%, is very limited. I think it would be better if we had more mortgage lenders available with a lower deposit and for those with a less-than-perfect credit score as this seems to be most first-time buyers.
Copy

Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Just this week I helped my son complete his first property purchase, which is on a shared ownership basis. Shared Ownership was the only way he and his girlfriend were ever going to afford to move out of rented accommodation and was able to do so using a 100% mortgage too. Shared Ownership should be a much bigger thing to help people get on the property ladder than it currently is, but it has several headwinds to overcome; it suffers from a lack of real exposure for many in the public, there is a lack of lenders operating in the space (hats off to those that do, but it needs more involved) and Housing Associations seem to make the process more difficult and frustrating that it needs to be, by adding another layer of bureaucracy to wade through. It could be a really valuable tool to help people into home ownership though, despite not being perfect and should be something people look at and consider as a viable option.