When I meet with our intermediary partners, I often get a mixed reception when I wax lyrical about the many benefits of shared ownership, which can often be misunderstood.  Some brokers regularly place shared ownership mortgages with us and are familiar with the solution it offers for lower income households, while others admit to feeling a little confused about the benefits it offers, and the cases in which it can help would-be buyers take their first steps onto the property ladder.

For aspiring first time buyers this is the hardest time in living memory to get onto the property ladder and shared ownership schemes are one of the most effective ways to reduce deposit and affordability hurdles, making it possible to buy at an earlier age and to begin to grow their equity sooner.

However, we recognise the need to continue to improve the experience for shared owners, and that lenders, brokers and buyers alike must be fully aware of the nuances of the scheme. That’s why we’re pleased to be part of the Shared Ownership Council which has launched a pilot Code of Practice designed to improve information for buyers so they can weigh up the pros and cons.

We recently commissioned independent research carried out by industry experts Bob Pannell and Peter Williams incorporating whole-of-market lending data.

It reveals that shared ownership is more affordable than private renting in the vast majority of geographical areas. What’s more, due to capital repayments and house price increases, shared owners can be significantly better off than private renters as a result of equity growth.

The model of part-rent, part-buy is widely accepted as the most effective way of reducing the deposit hurdle for first-time buyers, but the long-term financial impact compared to private rent is less understood, and many brokers have preconceptions about what it means to be a shared owner.

The report indicates that monetary gains for shared owners are significant. It is interesting to learn that of 294 local authorities, shared ownership is forecast to be more affordable than private renting in 93% of areas at year 10, rising from 77% in the first year. And across 83 ‘high rent’ local authorities, where rental payments make up over 30% of income, shared ownership will be more affordable than renting in 98% of areas in 10 years.

Factoring in capital repayments and expected house price increases on the share purchased, based on conservative assumptions shared owners would be on average £29,000 better off as a result of equity growth, rising to £42,000 in London, in addition to incurring lower monthly costs. Coupled with the lower deposit requirements, the findings demonstrate the far-reaching benefits of shared ownership.

Currently, only the highest earning 10% of households can afford to buy an average-priced home of £298,000. However, the overwhelming majority of people in England aspire to buy a home of their own, and therefore it is extremely important to me that we raise awareness amongst the mortgage community of the role shared ownership plays in achieving that for low and medium income households.

I strongly believe that shared ownership extends the promise of homeownership to more people and will make the majority financially better off over time.

At Leeds Building Society we have continued to call for long-term solutions to the housing crisis facing renters and homeowners. We believe that increasing the supply of shared ownership homes could help the government to achieve its objectives to deliver 1.5 million new homes, as well as supporting more people into affordable ownership.

Martese Carton is director of mortgage distribution at Leeds Building Society