Shared ownership schemes won't help most borrowers, says CML
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Shared equity and shared ownership schemes are unlikely to help a large number of borrowers, says the Council of Mortgage Lenders.
The trade body made the statement in its latest newsletter in response to housing minister John Healey’s call for lenders to give more support to the schemes at the CML’s annual conference.
The newsletter states: “The reali-ty is that shared equity and shared ownership schemes are never likely to help large numbers of borro-wers.The market would work more effectively with a narrower range of schemes and if the government devises and administers them in ways that encourage maximum participation by lenders.”
A CML spokeswoman says: “The public funding to support these schemes will be limited.
“They are valuable for a minority but are unlikely to play a big part in the mainstream market.”
She adds that the schemes will only help more buyers if there is massive government investment, which is unlikely given the current state of the public finances.
Paul Fortune, a specialist in affordable housing at Exeter-based Westexe Mortgages, agrees.
He says: “A lot of clients are interested in these schemes but not many are able to move forward on them. There’s a shortage of stock and they still need to have 15% deposits.
“The schemes were meant to overcome the need for large deposits but instead they have become self-defeating.”
But George Henderson, director of Independent Mortgages & Financial Solutions, adds that the schemes could help a larger number of borrowers if more lenders got behind them.
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