According to a survey for Ecology Building Society, which was carried out by YouGov and surveyed 757 potential first-time buyers, the government should do more to support and promote the scheme.
With the DMS Homes scheme, also known as Council Shared Equity or the reduced market value scheme, housing providers offer a discount on the purchase price of new-build properties.
It is only available to those who do not own their own home and whose income does not surpass 45% of the DMS property price. It is also ring-fenced for local residents.
The survey also found that 44% said there was a lack of affordable properties in their local area and 46% said there was a lack of affordable properties more generally.
Approximately 82% of respondents said it was important to live in their local or surrounding area.
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Nearly three-quarters thought house prices generally were a barrier to purchasing a property.
More awareness needed
Daniel Capstick, Ecology Building Society’s senior mortgages product and proposition manager, said: “We commissioned the research after launching our Affordable Local Homes mortgage, which was designed specifically for DMS Homes.
“DMS can help thousands of people each year to stay in their local communities, but we were dismayed only 9%, fewer than one in 10 of those surveyed by YouGov, had even heard of it.
“In Scotland and Yorkshire, awareness was even lower; only 5% – or one in 20 people surveyed – had heard of DMS, even though these are regions where many buyers may struggle to afford homes in their local communities. It’s unsurprising that awareness was higher in London, where affordability is most challenging, but even then only 14% – about one in seven people – had heard of DMS.”
He added: “Once DMS was explained to the survey participants, 59% expressed an interest in the scheme and said it could help them to buy their first home.
“This shows a clear need for the government to do more to better publicise DMS, which can help thousands of individuals, couples and families each year to buy homes and stay in their local communities.
“DMS enables those communities to remain sustainable and thrive, rather than forcing people to move away from family and friends because they can’t afford to buy where they grew up. We’ll be sharing our YouGov research with the Ministry of Housing, Communities and Local Government.”
Capstick noted that buyers of affordable housing can struggle to secure mortgages, as restrictions designed to help DMS purchases can “put off many mainstream lenders”.
He said most lenders are “unwilling to offer home loans on properties with residence restrictions, so this lack of mortgage choice risks locking first-time buyers out of housing schemes created to help them”.
“That’s particularly true of schemes aimed at enabling purchasers to stay in their local area, which is why we launched our Affordable Local Homes mortgage.
“This section of the first-time buyer market is growing, but currently under-served by lenders, so we’re urging more mortgage providers to follow our lead and look at how they can support this customer group,” he noted.
