Southern England is shared ownership hotspot
First-time buyers in southern England are more likely to opt for shared ownership than those in other parts of the country, according to research by trade body the Council of Mortgage Lenders.
It noted that this is not surprising given the heightened affordability pressures in the region.
The CML is developing a dataset on the shared ownership sector to provide more information on lending in this area.
High value homes
It found that the majority of shared ownership borrowers are first-time buyers, who tend to stretch their purchasing power and buy higher valued properties than other first-time buyers. This is even the case when allowing for a different regional mix.
Like other first-time buyers, those purchasing a home under shared ownership are increasingly opting for repayment terms of longer than 25 years. In 2016, six out of 10 shared ownership first-time buyers chose to repay over a term of longer than 25 years.
Fixed rates are the most popular choice, and over half are still on a fixed rate, while other shared ownership borrowers have reverted to lenders’ variable rates.
Around 200,000 households in the UK currently live in shared ownership properties – a relatively small number compared to those in full owner-occupation, but still a significant number of borrowers. Lenders have 40,000 live shared ownership mortgages on their books.