The idea that shared owners are ‘marginal’ buyers or represent high risk lending for banks and building societies is a myth.
Figures released by the National Housing Federation’s Home Ownership Advisory Panel today show that shared owners are no more likely to be repossessed than those who own 100 percent of their property with a mortgage. The figures suggest Buy-to-Let ownership is more likely to lead to repossession than shared ownership.
In 2008/09, just 0.38 percent of shared owners (432 households) had their homes repossessed. In 2009, 0.42 percent of mortgaged owners in the main housing market (46,000 households) and 0.46 percent of Buy-to-Let owners (5,700 landlords) were repossessed.
Helen Muir, Operations Director at Orbit Group, speaking on behalf of 20 major Low Cost Home Ownership providers, said “The fact is that housing associations apply strict affordability tests to ensure applicants can afford to buy and sustain shared ownership. These tests were often stricter than the measures applied by lenders to other first time buyers and Buy-to-Let when the housing market was booming and lending competition was fierce.
“Shared ownership is sometimes painted as ‘risky’ lending. These figures show that to be a myth. Shared ownership is a great market for lenders with real potential for growth.
“Housing associations are interested in sustainable communities. Marginal, high turnover ownership is not good for communities and not good for housing associations as social businesses with a long term stake in communities. We’re very careful about who buys shared ownership homes.
“Housing association shared ownership providers also consider options such as reducing the equity owned and offering access to specialist financial advice if shared owners find themselves in financial difficulty, options frequently not available to owners in the general market. Repossession for housing associations is always a last resort.”
More information:
Helen Muir, Operations Director – Orbit Group
02476 438125 or 07768 745845
Simon Graham, Blue Sky
0115 981 3900 or 07710 462445
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1. Comparative repossessions – shared owners vs. whole market
Type Year No. of repossessions % of all of type
Shared owners 07/08 255 0.24%
Home owner (mtged) 2008 40,000 0.34%
Buy to Let owner 2008 4,000 0.35%
Shared owners 08/09 432 0.38%
Home owner (mtged) 2009 46,000 0.42%
BTL owner 2009 5,700 0.46%
Source: Hsg Corp/TSA RSR 07/08 & 08/09; CML repossession data Feb 2009 & Feb 2010.
Shared owner figures are based against total properties where owner has not staircased to 100% ownership (07/08 = 103,309; 08/09 = 114,665).
2. The National Housing Federation’s Home Ownership Advisory Panel has established a group to promote the value and importance of shared ownership as a key product in the housing market and to counter some of the myths that have grown up around shared ownership in the last two years. Twenty key housing association providers of Low Cost Home Ownership have joined the group, which is chaired by Moat.
The group members and supporters are: A2 Dominion, Affinity Sutton, Bromford HG, Catalyst HG, L&Q, Metropolitan Home Ownership, Moat, Orbit Group, Riverside HG; Advance UK, Bedfordshire Pilgrims HA, Connected Partnership, Great Places HG, Guinness Partnership, Hyde HG, Radian HG, Raglan HG, Southern HG, Sovereign HG, Thames Valley HA.
The National Housing Federation represents 1,200 independent, not-for-profit housing associations in England and is the voice of affordable housing.
