"High interest rates, property prices and rising costs have led to a situation where many are losing faith that they will ever be able to get onto the ladder."
- Louise Apollonio - TML
Just 35% of prospective first time buyers can accurately define shared ownership, indicating that many could be missing out on this route to home ownership according to new research by The Mortgage Lender.
With first-time buyers up against a multitude of challenges to get onto the property ladder, TML’s research highlights that some knowledge gaps could be preventing them from taking steps towards their property goals.
17% of first-time buyers thought that shared ownership meant co-owning with your family. A further 14% were under the impression that shared ownership meant sharing the responsibility of being a landlord on a property, 8% believed it meant owning with a stranger and a further 7% identified it as owning with a friend.
Another 14% said they didn’t understand shared ownership at all, and another 5% said it meant owning a few rooms in a house.
With 65% either defining shared ownership incorrectly or being unable to do so at all, it’s clear that there is a significant knowledge gap around this alternative route to home ownership.
And the path to ownership has never been more complex. Recent research from the Building Societies Association found that over the last 70 years, it has never been a more expensive time to be a first-time buyer than now.
Affordability challenges, high house prices and the rising cost of living have left FTBs with significant roadblocks to getting on the ladder. To combat this, and as part of the BSA’s report, they called for radical support from the government to support first-time buyers.
However, while support is clearly needed, TML’s research indicates that current mechanisms to help FTBs enter the property market may not be being utilised as much as they could be. The knowledge gap around shared ownership likely means some of those who may benefit from buying a property this way could be missing out through a lack of understanding.
Louise Apollonio, Head of Corporate Accounts at TML, comments: “No one can be in any doubt as to how difficult it is for first-time buyers at the moment. High interest rates, property prices and rising costs have led to a situation where many are losing faith that they will ever be able to get onto the ladder.
"And while evidently there are steps that the government must take to help this group, there is also support and alternative routes to home ownership available that could make a huge difference to many first-time buyers.
“The first hurdle to get onto the ladder is raising a deposit, which is particularly difficult for those renting who are also dealing with steep rental price rises.
"However, that doesn’t mean that they wouldn’t be good candidates for owning a property. Shared ownership provides an opportunity for first-time buyers to get a step onto the ladder without the need for a huge deposit, allowing them to slowly work up to total ownership of the property.
“We believe that everyone deserves a place that they call home and are committed to ensuring that our lending practices support our end-customers’ real-life situations. This is why we recently established our shared ownership proposition and will be working with our broker partners to help their first-time buyers get that all-important first step onto the ladder.”
