For many in today’s post-lockdown world, that is the question. And Shared Ownership (SO) could be the answer. Here’s why.
There are a lot of conflicting narratives about the housing market at the moment and it’s causing a fair amount of confusion for prospective house buyers. On one hand, some are reporting exceptional demand and increasing property prices, whereas many are questioning if it’s wise to buy when the future is so – excuse the cliché – uncertain.
I can understand the apprehension. Lockdown was pretty hairy and what was happening back then in the mortgage market was unprecedented. We had very few lenders accepting applications and, essentially, it was ‘illegal’ to move house for a while. At the same time, many jobs were lost and the economy tanked.
But we did learn a lot about ourselves. And we definitely learned about the places we call home. Some found that their particular corner of the world wasn’t the right shape for them, or perhaps that they needed more access to green spaces. Meanwhile, others in rural locations longed for better internet connections and a bit more human interaction.
The heart says it’s time to move house. But then we read the latest news bulletin and the head says it’s time to stay put.
To add to this conflict, mainstream lenders have been getting a fair amount of negative press for the rates they’re offering or the amount of deposit they’re asking for. Just last week, one of the UK’s biggest mortgage lenders, Nationwide, altered its rules on the amount of money buyers could use from the ‘bank of mum and dad’ and now, to get a mortgage with a 10% deposit, they must prove that they saved 75% of that deposit themselves.
Those of us in the industry will appreciate that these decisions are based purely on risk. They may make for unpopular headlines, but they protect not just the lender but the buyer. And it’s worth noting that if these lenders weren’t tightening their belts, the headlines would probably be all about irresponsible lending.
Meanwhile, Shared Ownership just keeps on going from strength to strength. I’ve been ‘banging on about’ SO being a knight in shining armour for so many people over the years and it’s really coming into its own at the moment. Here, lenders are offering competitive interest rates and low deposits – many at just 5%. And don’t forget, that is just 5% of the share you’re buying and not the full price of the property.
Plus, affordability comes into play much more in Shared Ownership lending and the mortgage providers are much more likely to consider the bigger picture when making a decision. Right now, many people have had reduced outgoings because they’ve not been commuting to work, buying lunches and coffees, etc. If they know that they’ll not be returning to their place of work for the foreseeable future – or indeed, ever – then that equates to a considerable, long-term cash saving. (Admittedly, things may change when it gets colder and we have to factor in the cost of heating our houses, but I can’t imagine it will make a huge difference to people’s outgoings.) Now just might be the right time to save for that deposit.
The joy of working in the world of Shared Ownership is that it has stayed true to its roots and it’s all about getting people into the home that they need and deserve. It’s easy to lump SO with the open market, but it’s not the open market; it’s specialist and it’s caring and it’s about people’s lives – and not just the numbers.
Certainly, the market looks different right now and there are challenges out there, but they’re not impossibilities. At TMP The Mortgage People, we are seeing record numbers coming through our doors and it would be pointless if we couldn’t get them through their own front doors. But Shared Ownership makes it happen. And that’s the beauty of it.
So, if you’re thinking about buying, but are unsure, can’t make the figures work for you, or just want to look at other options, try Shared Ownership on for size. It’s perhaps not for everyone and you’ll need to be realistic about what you can actually afford, but you’ll find it’s a more human, more accommodating way of owning a home.
Which brings me back to my initial question: to buy or not to buy?
I’m going to answer it with another question. Why not buy a bit, rent a bit?