According to our latest poll of brokers, just under a third of intermediaries said it was straightforward finding shared equity and shared ownership solutions for their clients. In contrast, more than a quarter (27%) felt there are insufficient shared equity and shared ownership properties being built, while another quarter (25%) believe that the issues are caused by a combination of a lack of buildings and lender support.
New data from the National Housing Federation suggests that of the 15,000 new homes started in the final quarter of last year, just over 28% were built for shared ownership.
Helen Pierson, head of business development at Mortgage Bureau, said there was no question that more shared ownership homes are needed, pointing to the 85,000 shared ownership approvals each year.
However, she said that the attitude of lenders was also crucially important, urging more lenders to enter the market and offer more flexible terms.
She continued: “We need lenders to consider lower deposits – why do most lenders need a minimum of 10% to 15% when Help to Buy only requires 5% from the purchaser? Added to that, the fact that there are fewer lenders in this sector means that a premium can be charged for a shared ownership product – the basic economics being that lack of availability drives up cost for those least able to purchase outright.”
Just 90 deals
According to data from Moneyfacts, there are just 90 shared ownership deals available today, though the number of lenders active in the market has grown from 19 to 25 over the last year.
Rachel Geddes, business principal, Mortgage Advice Bureau in London, said that the under-supply of suitable homes is proving an issue. She said: “We are still speaking with lots of clients who are interested, but the lack of property stock has been the major problem. There has also been a lot of confusion from the client’s point of view on how shared ownership works. We have been spending lots of time educating our clients so that they understand these schemes and know if it is best suited to them or even if they are eligible.”
Data released by the Council of Mortgage Lenders in February suggested that the south-east is a shared ownership ‘hotspot’, as a result of the heightened affordability issues in the region, though research from Which? at the turn of the year suggested that even shared ownership homes in London are unaffordable for most. Currently around 200,000 households live in shared ownership properties.