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A problem shared is a problem halved – is shared ownership the answer?

Adrian Moloney | 08.07.2020

Home ownership has plummeted for younger generations, and the past couple of decades of rising house prices have presented a problem for thousands of prospective first-time buyers.

Can shared ownership be the solution?

This, combined with the fact that the current help to buy scheme is due to undergo changes in 2021, and set end in 2023, means that those looking to step on the property ladder have few options available.

Shared ownership begun back in the 1970s. With lower deposits in place, shared ownership properties are generally more accessible than standard mortgages, and more secure than private renting.

Schemes like this offer an alternative route onto the property ladder, giving first-time buyers the chance to find a place they can call home, at an affordable price.
However, one thing you may have not considered is that the help to buy changes mean that the scheme will only be available for first-time buyers, so if your client wants to move house or upsize, and they’re struggling to find a deposit, then shared ownership may be the only solution.

Kent Reliance for Intermediaries understands this, and the demands that prospective buyers of today encounter. While many applicants may be turned away due to insignificant deposit levels, we offer 0% deposit on an application – one of only a few lenders to do so.

Is shared ownership the silver bullet?

It’s important to find an expert lender who’s experienced with shared ownership. Mainstream lenders have more restricted lending criteria, which doesn’t always meet the needs of the customer. A specialist lender such as Kent Reliance for Intermediaries has the expertise required, ongoing relationships with housing associations, and flexible criteria. We can work in partnership with you to ensure our propositions can support your clients’ needs.

What you need to know when speaking about shared ownership:

  • Loan restrictions – There may well be restrictions on how much a buyer can borrow from a particular lender, so it’s important to know this from the start – especially if your client is looking to purchase a larger share of the property in the future. This can limit their options moving forward, so it’s important to check.
  • Buyer ambitions – Each lender will approach shared ownership differently – some will offer staircasing (buying additional portions of the property), while others will provide different rental or mortgages costs. These options benefit your clients in different ways, so understanding their preferences and goals from the start is vital.
  • Housing associations – Lenders may need to know if there’s a relationship between the housing association and shared ownership homes. It’s important to know this, as it may impact the buyer when they come to sell their home in the future.

When considering the above, it’s worth noting that Kent Reliance for Intermediaries offers part-buy and part-rent mortgages for shared ownership properties, and accepts up to 100% maximum share value.

We also offer 100% staircasing, which provides better flexibility and opportunities for buyers looking to purchase more shares in their property, and that’s why we’ll only consider properties with housing associations that permit this.

With the current stamp duty holiday in place until 31 March 2021, there’s never been a better time to help your client find their first shared ownership property. So get in touch today to find out how we can help.

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