Home buyers, especially those looking to purchase their first property, appear to be unaware of shared ownership options with the number of sales in the sector falling across England and Wales.
Only 11% of aspiring first time buyers say they would chose to purchase a shared ownership property, with nearly 80% opting to purchase a home outright instead and 30% of aspiring first time buyers admitted to not fully understanding what shared ownership is.
The research from My Home Move also shows that despite numerous pledges from the Government to increase access to housing for Britain’s aspiring home buyers shared ownership activity has decreased across seven out of nine regions including London, the Home Counties, North East, South East, Wales, West Midlands and Yorkshire.
The provider of mover conveyancing services says more needs to be done to increase the popularity of shared ownership among home buyers, as it currently accounts for less than 1% of housing stock across England and Wales.
The research is published as the organisers of Shared Ownership Week, which runs from 21 to 27 September, also reveals its latest analysis showing that 54% of 21 to 30 year olds have never heard of shared ownership.
The campaign aims to change this, and educate aspiring home buyers about how the scheme can help them on to or up the property ladder. It points out that shared ownership has been available since the 1980s, but has been restricted with local councils dictating who should be a priority based on a wide of range of factors from salary to profession to where the buyer comes from.
Following a relaxation to the eligibility criteria last year, the scheme is open to people of any occupation, and ensures second steppers, those who have owned before, are given equal priority with first time buyers. Furthermore, there is no longer a cap on the number of bedrooms an applicant can request, providing they earn less than £80,000 a year, or £90,000 in London.
Organiser also point out that shared ownership enables buyers to purchase a share in a new home that they can afford, usually a minimum of 25% of its market value, with as little as a 5% deposit. The buyers pay a subsidised rent on the remaining share of the property, usually resulting in lower monthly costs than renting on the open market, and can buy further shares at any time, known as ‘staircasing’, right up to 100% and outright ownership.
Doug Crawford, chief executive of My Home Move, pointed out that last February the Government pledged to fix Britain’s broken housing market, and yet one of the schemes designed to encourage home ownership is falling in popularity.
‘Our research highlights just how small transactional volumes for shared ownership are, raising questions as to whether the scheme needs to change its image to attract new home buyers. It’s our belief that home buyers, despite the lack of housing stack, are turned off by phrases like affordable housing which is often used to describe shared ownership,’ he said.
‘Yes, they want to be able to afford their home, but they want to buy a dream. The idea of buying a home that has been built to fulfil a quota, or is being sold through a housing association and so has the negative connotations of social housing attached to it, is just too much for some,’ he explained.
‘Perhaps we need to rebrand the image of shared ownership, to bring it in line with initiatives like the Government’s Help to Buy, to make it more attractive to first time buyers. Shared ownership can offer those trapped as generation renters a real possibility of getting onto the property ladder, but it’s all a question of selling them the dream and maybe it’s time to find out what would make aspiring first time buyers change their mind,’ he added.
Housing and Planning Minister, Alok Sharma, said that the Government is determined to make housing more affordable, increase supply and help more people get onto the housing ladder and that shared ownership plays a key part in this, helping young aspiring home buyers to achieve their dream of home ownership.
‘We’ve already helped hundreds of thousands of people become home owners through Government backed schemes and want even more people to benefit in the future. That’s why Shared Ownership Week is such an important event, spreading the word about the fantastic opportunities and support available, particularly for first time buyers,’ he added.