Half of first-time buyers consider shared ownership

Research shows the varied reasons for considering the scheme

Half of first-time buyers consider shared ownership

One in two first-time buyers have considered or are considering using shared ownership to get onto the property ladder, new research from The Mortgage Lender (TML) has revealed.

Shared ownership allows prospective homeowners to part-buy and part-rent properties that might otherwise be unaffordable. Despite affordability concerns, 65% of first-time buyers were initially unclear about what shared ownership entails. Once explained, half said they would consider it as an option.

Among those who bought their first home in the last five years, 17% opted for shared ownership. In addition, 19% of those yet to purchase have considered the scheme, with over 12% likely to use it.

TML said the reasons for considering shared ownership vary. About 26% of respondents appreciate that it allows them to gradually build ownership, while another 26% noted that it made otherwise unaffordable properties accessible.

A quarter said shared ownership enabled quicker purchases, and 24% found monthly repayments cheaper than full mortgages or renting.

For 20% of respondents, shared ownership made it possible to live in desired locations, particularly in London, where the average property price is £518,000. Nearly a fifth, or 19%, said they could not have entered the property market without the scheme.

“Affordability continues to be one of the biggest barriers for prospective buyers when it comes to getting onto the property ladder,” said Chris Kirby (pictured), head of sales at The Mortgage Lender. “As a result, it can mean many seek help elsewhere to raise the funds for purchasing a property, or otherwise make certain sacrifices, be it location or property type, to get on the ladder.

“Shared ownership, however, is a well-established option that optimises affordability and creates greater access to those looking to achieve homeownership status. It’s encouraging to see so many consider, or have taken up, this avenue to purchasing property as it gives many buyers the opportunity to get a foothold onto the ladder they otherwise may not have had. It also allows buyers to build their wealth creation when it suits them.

“Our own shared ownership proposition also looks to provide an even greater range of possibilities for customers with smaller deposits, be that by optimising affordability based on how we assess self-employed and complex incomes or by taking a more pragmatic approach to past credit issues.”

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