The term shared ownership is acting as a barrier to the very borrowers it is designed to help, broker Just Mortgages has claimed.
The firm said that feedback from across their broker network reveals clients regularly misunderstand who the scheme is targeted at and what the term really means.
Just Mortgages said 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 is often positioned as a vehicle for those first-time buyers 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 believes that this is one of an 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.
John Philips, national operations director at Just Mortgages, said: “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.
“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.
“I’m worried that the terrific opportunity shared ownership provides to help people get on the property ladder is being diminished through clumsy terminology so maybe a rebrand is in order. 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.
“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 Wednesday, 19th April 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 by visiting: https://forms.justmortgages.co.uk/jmnbevent/
