A lack of affordable housing is widely regarded as the key reason that prevents buyers from stepping onto the property ladder yet it seems that many homebuyers are in the dark as to the opportunity that shared ownership and shared equity schemes offer.
Nearly three quarters (72%) of respondents said that they would not consider buying a house through a shared equity or ownership scheme, almost a fifth of whom believed that it would be too expensive to pay both a mortgage payment and rent monthly. However, the reality is quite different.
Many borrowers will also be able to access mainstream mortgage rates meaning that they don’t have to choose from a reduced range of products or pay a premium. Of those who said they would consider a shared equity or ownership home, over two thirds (69%) said it would make home buying more affordable for them.
The location of a property is for most buyers a key driver behind the decision of whether that home is right for them.
Whilst 68% don’t know about any affordable housing schemes in their area and 15% of those who were not interested in the schemes said that the area and type of property available via affordable housing schemes would put them off buying, a savvy four in ten of those who would consider the schemes said that buying a shared ownership or equity home would enable them to live in an area they couldn’t normally afford.
These buyers, who are challenging the common misconception that affordable housing schemes are located in undesirable areas, are benefitting from buying in sought after new developments or in communities that already have a large portion of owner-occupiers. Nearly half (44%) said that it would allow them to get onto the property ladder.
Alarmingly nearly a third (31%) of people don’t want to find out more about how to get onto the property ladder with the help of an affordable housing scheme and one in ten don’t know where to turn for help and advice.
Stephen Noakes, Halifax commercial director for mortgages, comments:
“Affordable housing provides a great leg-up onto the property ladder and shouldn’t be overlooked. Many people don’t know where to turn to find out more about these schemes or wrongly believe that they aren’t eligible, but talking to a housing authority or developer is a good place to start.
"When it comes to looking for a mortgage, buyers could be surprised to hear that they can usually qualify for a mainstream deal.
“For those who think they are priced out of the market we would encourage them to consider an affordable housing scheme. Once a portion of a home is purchased, most schemes will allow the owner to ‘staircase’ - a process that enables them to slowly increase the amount of the home they own - as and when they can afford it, providing valuable flexibility.”
Nearly three quarters (72%) would not consider buying an affordable home through a shared equity or shared ownership scheme. Amongst those people, the following reasons were cited:
- 19% think it’s too expensive to pay both a mortgage and rent
- 15% don’t want to live in the areas or property types these schemes offer
- 26% don’t want to rely on someone else to help them into their home
- Only 6% feel there's a stigma associated with these schemes
Almost a quarter (24%) of Brits would consider buying an affordable home through a shared equity or shared ownership scheme. Amongst those people, the following reasons were cited:
- Over two thirds say that it would help them afford to buy a house.
- 41% say it would allow them to buy in an area they couldn’t normally afford
- A fifth would value the support of the housing association or developer
- 16% would consider an affordable home because if property prices fall, they won’t feel it so much by owning only part of the property
68% don’t know about any affordable housing schemes in their areas. Two thirds (66%) do not know the difference between shared equity and shared ownership. More than three in ten (31%) do not want to learn more about affordable housing.
