New research has flagged up that a surprising number of young people are not aware of shared ownership as a way of getting onto the property ladder.
A survey by the Leeds Building Society (LBS) says that 40% of 18 to 24-year olds have never heard of shared ownership, where it’s possible to buy a share of a property and pay rent on the rest. Introduced in the 1970s, the schemes are run by housing associations and allow the shared owner to purchase more of the property as time goes on.
Open to the idea
Further data in the survey, which covered 2,300 people and was carried out by YouGov for LBS, revealed that of the 18-24-year-olds who knew of shared ownership, just a fifth knew how it actually worked. But promisingly, once aware of the concept, 24% said they would be ‘very or fairly likely’ to use it.
Awareness of the scheme comes with age according to LBS, with 83% of 55s and over, 79% of 45-54s, 78% of 35-44s and 70% of 25-34s aware of the scheme.
“It’s a proven formula that helps people secure a home, even where a traditional mortgage is not affordable, and its longevity is testament to its success,” said Jaedon Green, LBS’ Director of Product and Distribution.
“The method is becoming increasingly popular for first time buyers as it reduces the need for a significant deposit, which can be difficult for some to manage. The scheme also permits first time buyers to combine it with a Lifetime ISA, maximising any deposit.
“However, awareness still needs to be raised about the benefits of Shared Ownership, as it continues to be misunderstood and underutilised by many of the people the scheme was designed to help, particularly those aged 18 to 24.”
Other options for first-time buyers?
One alternative for first-time buyers is the Help To Buy loan scheme. To qualify, a deposit of 5% must first be saved but recent research showed how difficult this can be.
Compare My Move surveyed how fast that 5% can be saved for in 50 places, with Burnley topping the list at just seven months. But large regional variations apply, and millennials took under a year to save this much in only 14 of the 50 towns or cities studied.
Shared ownership could be one version of a helping hand for young first-time buyers – crowdfunding is another currently gaining traction – but knowledge of the idea needs to be widened as Jaedon Green adds:
“The fact that almost a quarter of those aged 24 or under would be likely to use Shared Ownership once they found out how it worked shows the importance of increasing awareness and educating those who would benefit most from Shared Ownership.”