For many, shared ownership is one of the few accessible routes to property ownership now that traditional mortgages are more difficult to obtain. Social housing tenants and key workers, in particular, have found it to be an incredibly valuable way of investing their money in their home.
Brokers are uniquely placed to add value in this area and do a great deal of good work in the shared ownership market. There are great opportunities for income, particularly when they can approach the market with well-structured and good value products.
It is an area in which there is considerable potential for the future.
At a time when affordability remains a major cause for concern, flexible and innovative solutions like shared ownership will play an integral part in maintaining the liquidity of the property market. With the situation showing few signs of improving in the near future, demand is only likely to increase among clients.
Before brokers can take advantage of the benefits that shared ownership and equity can offer them and their clients, however, there is a significant amount of groundwork to be done.
Unlike the vast majority of products, these require relationships to be built not only with lenders, but also with housing associations, HomeBuy agents and local authorities. They will be able to provide comprehensive advice on the schemes they offer, the demand for these schemes and the sort of clients for whom they will be suitable, enabling brokers to gauge the state of local, regional and national offerings.
Once brokers have a complete understanding of the market and have built the right relationships, the second step is for advisers to raise awareness of shared ownership among clients for whom it might be an option. The importance of education is particularly relevant in this area, given November’s research by the Halifax which revealed that 72% of potential homebuyers do not consider shared equity and shared ownership schemes.
There is a widespread belief among clients that shared ownership or shared equity is “not for them”. On the one hand, some believe that they cannot afford the double financial responsibility of a mortgage and a rental payment; on the other, some have the perception that the stock available may not be of the quality of a rental property.
Brokers are well placed to dispel many of these misconceptions and have an opportunity – and, indeed, a responsibility – to ensure clients are matched with the best solution for their individual needs.
Even within the bounds of shared ownership and shared equity, there are a significant number of options and products, enabling ownership of between 25% and 75% of a property. Such shared ownership and shared equity schemes are ever more widely available, across a real variety of properties.
New and renovated flats and houses are all there for consideration under New Build HomeBuy, Rent to HomeBuy, HomeBuy Direct, Open Market HomeBuy and Social HomeBuy, which opens up products for a broad range of individuals and circumstances.
Now more than ever, diversity within a broker’s portfolio is integral to maintaining the highest level of service to clients, at a time when few can afford to buy at the current high prices and fewer meet the stringent criteria required for a mortgage from a high street bank.
Taking into account the growing market for shared ownership means brokers can save clients the hassle and confusion of approaching each individual bank and building society to find the best choice for them.
It is also an opportunity for brokers to build a sustainable long-term base for their own business based on the likely growth in the market – something that should be a key consideration as the property industry continues to find its feet.
