New research has revealed over a third of first-time buyers have never heard of the Shared Ownership scheme which could give them a leg-up onto the housing ladder.
What’s more, less than one in five (19%) of those who had purchased recently used the scheme. Of those who are planning to buy a home, only 13% of first-time buyers are planning to use it to help them buy.
Survey respondents told Leeds Building Society why they weren’t going to use Shared Ownership, and several of the main reasons were based on preconceptions about the scheme:
- 28% of first-time buyers believe that a Shared Ownership mortgage would be more expensive than a traditional deal
- 19% think that it’s too complicated
- 17% believe Shared Ownership “isn’t for people like them”
The reality, say Leeds Building Society, is different. More than three quarters (77%) of those who bought a Shared Ownership property said they didn’t need to save as much for their deposit and just under three quarters (72%) said it got them on the ladder sooner than if they’d used a standard mortgage.
Once all respondents who had not heard of the Shared Ownership Scheme were told about what it is, just over two fifths (41%) said it would either help them get on the ladder in future or could have if they’d known about it sooner (6%).
However, most people heard about Shared Ownership through word of mouth (18%) – only 3.4% found out about the scheme through a mortgage broker, 4% from their bank or building society, and 6% from an estate agent.
“There is a clear lack of awareness of Shared Ownership among the UK’s first-time buyers – this needs to change,” said Richard Fearon, CEO, Leeds Building Society, adding:
“It’s more expensive than ever to buy a first home and it’s evident that many savers still view a traditional mortgage as the way to get their first set of keys.
As an industry, we need to educate people about the benefits the scheme can bring and take responsibility for helping more people to get on the housing ladder. It’s not enough to mention it as an afterthought, or even not at all – first-time buyers should be told up front about Shared Ownership and how it can help them.”
2 responses
Probably a good thing – what is supposed to be affordable housing is turning into a nightmare for these poor home owners.
As a shared owner, I can honestly say that shared ownership is extremely risky. Housing associations are terrible to deal with and there are plenty of hidden costs that they only tell you about once you’ve signed on the dotted line. In addition, the rent is usually linked to RPI so increases very quickly and shared ownership mortgages have higher interest rates. When it comes to selling, you are expected to cover the housing association’s legal costs as well as your own. Stay away from this scheme.