Shared ownership one of few winners in ‘new normal’
1 October, 2020
Shared Ownership is one of the few winners to come out of what has been an extremely challenging year for all those involved in retail financial services, according to a new report by award-winning mortgage broker Censeo Financial.
Their latest Mortgage Insight analyses the effects the Coronavirus has had on the Shared Ownership property market, how Lenders have reacted to the pandemic and what challenges lay ahead in the next six months.
Says Censeo Founder Rupi Hunjan: “On the positive side, we have seen interest rates reduced to a record low, a Stamp Duty holiday and an incredibly busy late summer selling season. Demand is still high, particularly homes with some form of outdoor space.
This activity and demand means that in many areas house prices are continuing to rise and the good news is that this is likely to be sustained for the foreseeable future.”
However, the report also looks at some potential problem areas over the next six months. UK unemployment is already on the increase, inflation is on the up and GDP is down by 20%.
At the same time, while the demand is undoubtedly there (mostly driven by existing home-owners purchasing new properties), the total number of actual first-time buyers has fallen to a seven-year low in 2020.
In addition, Lenders have become much more risk averse and have withdrawn many of the higher LTV products, making it more expensive to finance buying a home.
That said, Rupi explains that Shared Ownership is still a thriving sector of the property market.
“Compared to outright ownership, purchasers are only buying a proportion of a home, so even a 20% or 25% deposit is a realistic proposition.
“Plus, the announcement this month by Housing Minister Robert Jenrick that the minimum initial share in a property could fall to just 10%, means that Shared Ownership has become an even more viable proposition for thousands of first-time buyers.”
To obtain a copy of the report plus a full table showing the latest lending criteria and rates, email firstname.lastname@example.org Or call Rupi Hunjan on 0207 090 7290 to discuss these findings in more detail.
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