The potential for advisers to create new business via shared ownership schemes is being overlooked, according to sector specialist Shared Ownership Services.
According to the company, the misconception that shared ownership schemes are only available to the socially disadvantaged is preventing many potential clients from becoming involved. In reality, many properties under the scheme are situated in desirable areas with the only criteria being that the applicant can afford mortgage repayments.
Shared ownership schemes are funded by the Government and are run through local authority housing associations. The idea behind the schemes is that people who cannot afford to buy their own property can apply to purchase a percentage of the property, with the housing association buying the rest. This means people who would not usually be able to get a mortgage for the full amount can still become property owners.
But with house prices rising, more people are being priced out of the market and are forced to rent or buy in less expensive areas.
Derek Hale, managing director of Shared Ownership Services, said many people can get a better deal if they buy through the scheme. ‘Shared ownership represents better value for money and is very affordable. Buyers get their foot on the property ladder and can, at a later date, increase the percentage they own. The only problem is that shared ownership is ignored by most when they are considering their options,’ he said.
According to Hale, key workers in health, fire and police services are given priority, but once they are accommodated, there are plenty of properties to be filled.
Buyers usually purchase around 50% of the property, but in areas such as London where prices are higher, the share can be lowered to around 25%. The remainder of the property is owned by a residential social landlord, which includes housing associations, trusts and co-operatives, and appropriate rent is charged for the unowned share.
