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Shared ownership

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 16. April 2024

Looking to speak to mortgage brokers about shared ownership. 

8 responses from the Newspage community

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Dariusz Karpowicz
Director at Albion Financial Advice
Shared ownership is currently underperforming due to a shortage of available properties, and many participants find advancing to full ownership challenging because of affordability issues. However, on a positive note, there's a lender in the market offering a no-deposit product specifically for shared ownership purchases, which could ease the initial financial burden. While this is a step in the right direction, potential buyers and brokers should remain cautious, understanding the scheme's limits and evaluating whether staircasing is a viable option in the long term.
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Simon Bridgland
Director at Charwin Private Clients
Shared ownership is not a long term solution, but it is a means of developing a larger deposit if the value of the property increases, which as we know could be compared to the toss of a coin. I believe it should be viewed as a short term solution to hop onto the property ladder with minimal deposit. Longer term, fees make it unattractive and costly if repairs are needed.
Users of the scheme should be aware that the rental payments often mean staircasing is very difficult in the future unless incomes have dramatically increased, as they are viewed by lenders in the same way as other credit commitments. The schemes are often used by young couples at the start of their lives together so usually its quickly followed by other costly purchases such as cars and home furnishings which place additional strain on household budgets, starting a family usually means a wage disappears, which simply translates as no chance of increasing the share of ownership.
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Michelle Lawson
Director at Lawson Financial
Shared Ownership isn't for everyone however it is generally for the more vulnerable borrowers. It isn't a 'cheap' option as there is apportioned rent payable as well as a mortgage. The risks are also there that the rent portion may rise as is standard with any leasehold arrangement and borrowers do need to budget for this. Increases can put already vulnerable borrowers in a disadvantageous position and leave them with very few realistic financial options.
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Denni Tyson
Mortgage and Protection Advisor at Henchurch Lane Financial Services
Shared ownership is one of those products and styles of mortgage that was at one point , a very popular choice. Enquiries have not increased , but what certainly has is the competition for each property. From clients who are out there reviewing properties,I take time to ensure that the figures always match. This is due to the flucutating figrues with service charge, rent etc with every style of property.

The most important message I communicate to those looking at Shared Ownership is having your figures ready prior to any viewing. Competition is tough for properties and the last thing you want is the mortgage to be declined as it's back to the drawing board and can be disheartening.

I don't think you will see more lenders get involved, it is niche that some lenders have dropped products all together in the last 18 months.
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Steven Neale
Director and Owner at SN Mortgages
With 11 other home purchase schemes schemes to choose from, Shared Ownership still has its place but as a poor credit mortgage broker, enquiry levels are low and I do not expect them to increase significantly with all the other schemes available – I quickly counted 12 schemes in England & Wales alone!
As a FTB, is First Home better that Shared Ownership?
Wales are still offering Help To Buy so why not move there?
There is definitely room for more lenders, in particular adverse lenders, as this sector I feel is not supported enough.
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Gary Bush
Financial Adviser at MortgageShop.com
Share and share alike I say, I have enjoyed advising clients on shared ownership property purchases and mortgages since 1992, the early days, for both first-timers and homemovers. I have found them a very useful device for getting more people on the property ladder and gaining equity share.
We've always been reasonably busy with shared ownership mortgages, we have become a kind of goto for these if the generally useless builder-related tied panel brokers can't cope we get passed the enquiries. Now the horrendously builder profit biased Help to Buy has been put to bed we expect the government, the new one that is, to take another look at shared ownership and offer a lot more assistance, as well as update some of the “draconian” housing association lease conditions that are out there. On the whole, we find the scheme useful for clients who have an extra bedroom need that their budget cannot afford, often making it possible for larger properties to be budgeted for. Thumbs up from us.
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Mark Robinson
Managing Director at Albion Forest Mortgages
Whilst flawed, the shared ownership scheme is the only widespread scheme actually helping people onto the property ladder currently. With the current government constantly neglecting help for first time buyers to get onto the property ladder.
We are seeing steady numbers with a good lender spread in the mix, a number of lenders have mentioned in the last few years that they want to get into shared ownership, but haven’t backed this up by releasing any products.
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Ellis Shepherd
Business Owner, Senior Broker at All About Mortgages
Having been a "specialist" affordable housing broker for over 11 years now, I have seen my fair share (no pun intended) of mortgage applications for Shared Ownership. I believe strongly in the scheme and find it helps people buy places where they might want to live, not settle for something on the outskirts because of house prices. Still, I ask you this, what's better - Renting and paying your landlord's mortgage for them, or owning a share of a property and paying some money towards your investment?
Sure, some of the lease issues need to be addressed and not forgetting the service charges (as the report indicates) but owning a share in something and not WASTING your money on purely renting, seems like a win to me.
If the government gave this scheme a pump in funding, it could be provided to the masses and would solve the housing crisis.