The broker firm said that feedback from brokers in its network show that clients “regularly misunderstand” who the term is aimed at and what shared ownership means.
There are also misconceptions around what properties are acceptable, what rates can be secured and how long the process may be.
Shared ownership is where a buyer without a deposit can buy a share between 10 per cent and 75 per cent of home’s full market value and pay rent to the landlord for the share they own. They also usually pay ground rent and service charges monthly as well.
According to government figures, there are around 202,000 households living in shared ownership homes in England.
Just Mortgages said that shared ownership is marketed at first-time buyers without a deposit, but it can be used in other situations, such as when a relationship breaks down.
The firm explained that in that kind of situation it leads to one party leaving a family home without a deposit but with an income or salary that could support mortgage payments.
It continued that this could be an “emerging group of borrowers” that shared ownership could help but is often “left off the agenda”.
‘An issue to be addressed with shared ownership’
John Philips (pictured), 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.”
He continued: “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 rebranding or repositioning would benefit the whole industry and we would welcome the involvement of lender and broker trade bodies to support this,” he noted.
