Why is shared ownership still such a well-kept secret?
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What's gone wrong with housing and how can we put it right? This is the question posed to Bromford's Director of Sales, Bev Hall, as she takes on the task of spreading the message shared ownership can help first time buyers.
What's gone wrong with housing and how can we put things right? It’s a big question and one that has been testing the combined brainpower of several housing sector big-hitters in the shape of an independent commission set up by the RICS (Royal Insitute of Chartered Surveyors).
Like the judges in TV MasterChef, they’ve chewed over and cogitated about everything from the high house prices and high levels of housing unaffordability to new government-backed moves like Help to Buy equity loans and private renting.
So what’s the upshot? Is there an improved, winning recipe that will help housing rise to the occasion?
Well, Inside Housing commentator Jules Birch sums it all up very nicely, I think, when he suggests that most people will disagree with some things in this just-published report. And most of us would agree when he rounds off a well-reasoned 1,000-plus word analysis by saying: “The fact that such a diverse commission can agree on the need for policies ‘to facilitate housing supply of all tenures rather than showing bias to just one or two’ is real progress.”
Progress is good. But what, I can hear you saying, about the here and now? What, in particular, can be done to help the many, many people who still feel they will never be able to make their dream of home ownership come true?
People like Matt McIntyre and Clare McLaughlin, who moved into their first home at Larks Rise, Coventry, a few months ago - and tell us that their home-buying dream was only possible thanks to Help to Buy shared ownership (not to be confused with Help to Buy equity loans).
People like Tanika Palmer who is equally thrilled with shared ownership and how the part buy-part rent formula made it possible for her to get on the property ladder where she wants to be - near her family and friends.
The fact that they can buy between 25% and 75% of their new home and pay low rent on the remaining share makes all the difference for people on lower incomes and probably don’t have the huge deposits that mortgage lenders now demand for outright sale. And, as we’ve shown, it’s making that difference right now.
In fact, NHF (National Housing Federation) research reveals that the average first-time buyer deposit in the South West − just one of the regions where Bromford Homes have developments − is now an eye-watering £32,209 while the average shared ownership deposit is less than half that at £13,065. And although the average first-time buyer on the open market would need a gross income of £36,811 to afford a mortgage, the average shared ownership buyer's income is just £22,800.
Figures like that really matter in an area like, say, Cirencester − Capital of the Cotswolds − where property prices are generally fairly high and average salaries are fairly low. That's why the NHF also compared total monthly housing costs and confirmed that shared ownership is significantly cheaper than buying outright or renting privately.
Here at Bromford Homes, we also crunched the numbers to produce some typical total monthly housing costs using our successful Fortuna shared ownership development in Cirencester as an example and following a similar formula to the NHF.
The figures confirmed that shared ownership is a truly affordable alternative to private renting and buying on the open market − and this is surely reflected in the fact that shared ownership sales at Fortuna are now close to hitting the 80 milestone.
What might surprise you after reading about all of this success with first-time buyers is that shared ownership remains what I have often called one of the property world’s best-kept secrets.
Despite the many hundreds of part-buy sales we’ve achieved, regular publicity campaigns like the annual Shared Ownership Week and our own sales and marketing efforts, we find that many first-time buyers still don’t know about it and/or they don’t understand how it works.
That’s why, for instance, we’ve created a parents’ guide to shared ownership - inspired by our knowledge that even if young buyers aren’t tapping into the so-called Bank of Mum and Dad to help with the deposit they are probably relying on them for advice.
We also organise open days at or near many of our developments across central England so that first-time buyers and other people who can’t afford to buy on the open market can quiz us about part-buy.
So you can see, I hope, that the BIG frustration for us is that, although we are helping hundreds of first-time buyers each year, we know that we could be helping more. Anyone got any BIG ideas to help us spread the word?