Shared ownership housing, a scheme which allows you to take out a mortgage on a percentage of a property and pay rent on the remaining percentage, has become a popular option in recent years for those looking to get their first steps on the property ladder. While it can be tempting to simplify the scheme for the purposes of eye-catching marketing, advertisers must ensure that they do not mislead, for example, by exaggerating the level of ownership offered.
To build strong foundations in your future shared ownership advertising: remember the three Rs.
First and foremost, marketers must convey the reality of the ownership level in their advertising. While outright ownership and shared ownership schemes have certain benefits in common, there are significant differences between the products. It is, therefore, important not to exaggerate an individual’s ownership rights on any prospective house and to make clear that shared ownership is a different product from a mortgaged property. That’s why marketers should avoid using terminology which suggests complete ownership of a home, such as “own” or “buy”.
This principle applies even if you have qualified such statements; you should ensure that the reality of ownership is conveyed by the overall impression of your ad. Statements which equate shared ownership with property ownership, but are subsequently qualified with more information about the scheme, are likely to be viewed as contradictions rather than clarification.
There are a number of unique risks to consumers when taking part in a shared housing scheme. You may be restricted from renting the property out, you may be restricted from buying a greater share in the property, and you risk losing your total equity, in other words, the total amount you have paid towards owning the property, in any repossession proceedings.
The ASA does not expect every risk or difference between shared ownership and outright ownership to be outlined in advertising. However, information on significant risks will likely be considered material information to consumers when deciding whether to participate in a shared ownership scheme. Omitting this information can be misleading, especially if the ad suggests consumers would have the same rights in relation to the part they “bought” as someone who had bought the property in full.
Incentivising the purchase of a shared ownership home may seem like it will reap rewards for marketers, but it is important that any promotions are administered fairly.
Marketers must consider whether the mechanics of their promotion, particularly the timeframe in which participants must complete the purchase of a shared ownership home, are suitable for such a considered and complex financial purchase. In a recent promotion run by a shared ownership housing trust, the ASA considered that the two-week promotion window meant that consumers could be rushed to make a quick decision on a considered purchase for fear of losing out on the offer because of the short timeframe in which consumers had to choose a shared ownership home and commit to purchasing it.
It is also important to remember that the wider promotional marketing rules must be followed by marketers when considering whether to run a promotion, and that significant conditions must be included in promotional marketing material.
- Home and garden
- Claims, endorsements and testimonials
- Property sales and lettings
- Online, catch-up TV and radio, in-app and in-game
- Mailings, email, phone/fax and messaging
- TV and radio (broadcast only)
- Poster and other out of home
- Newspapers, magazines and printed materials