New research from The Mortgage Lender (TML) reveals that 50% of first-time buyers would consider or have considered using shared ownership to get onto the property ladder. With affordability concerns prevalent among many aspiring homeowners, shared ownership allows them to part buy and part rent a property that may have otherwise been unaffordable.
TML’s research found that two-thirds (65%) of first-time buyers were unsure what shared ownership means. Once this was made clear, half said they would consider or are already considering this as an option to buy a property. Of those who have bought their first home in the last five years, 17% have a shared ownership property. Additionally, 19% of those yet to buy have considered utilising shared ownership, with just over 12% likely to buy using the scheme.
The reasons why first-time buyers consider shared ownership include its flexibility and affordability. Among respondents, 26% said it allows them to slowly build up to ownership of the property when it suits them, and 26% said they wouldn’t have been able to afford the property without shared ownership. Another 25% said it meant they could buy a property much quicker than first thought, while 24% said their monthly repayments worked out much cheaper than if they’d got a full mortgage or rented. For 20% of respondents, the scheme means they can afford to live where they want, which is especially important in places like London, where the average property price is £518,000. Furthermore, 19% said they wouldn’t have been able to get onto the property ladder at all without shared ownership.
Chris Kirby, head of sales at TML, commented, “Affordability continues to be one of the biggest barriers for prospective buyers when it comes to getting onto the property ladder. As a result, it can mean many seek help elsewhere to raise the funds for purchasing a property, or otherwise make certain sacrifices, be it location or property type, to get on the ladder. Shared ownership, however, is a well-established option that optimises affordability and creates greater access to those looking to achieve homeownership status.
“It’s encouraging to see so many consider, or have taken up, this avenue to purchasing property as it gives many buyers the opportunity to get a foothold onto the ladder they otherwise may not have had. It also allows buyers to build their wealth creation when it suits them. Our own shared ownership proposition also looks to provide an even greater range of possibilities for customers with smaller deposits, be that by optimising affordability based on how we assess self-employed and complex incomes or by taking a more pragmatic approach to past credit issues.”
