The term ‘shared ownership’ is acting as a barrier to the borrowers it is designed to help, according to Just Mortgages.
The mortgage advice company says that feedback from across its broker network suggets clients regularly misunderstand who the scheme is targeted at and what the term really means.
Other misconceptions around shared ownership include what properties would be acceptable, what rates are available and how long the process may take.
Just Mortgages says shared ownership is often positioned as a vehicle for those first-time buyers without a deposit but it highlights that the scheme can be appropriate in those situations where relationships break down.
It suggests that this is an emerging group of borrowers that shared ownership could help but is often left off the agenda as the name suggests it might not be suitable for that borrower.
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Just Mortgages national operations director John Philips says “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.”
“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.”
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“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 re-branding or re-positioning would benefit the whole industry and we would welcome the involvement of lender and broker trade bodies to support this.”
By Becky Bellamy
Source: Mortgage Strategy