A campaign set up by the National Housing Federation (NHF) touting the benefits of shared ownership has been deemed “misleading” by the Advertising Standards Authority (ASA).
The ruling issued by the authority states that the claims made on sharedownership.net, which was set up in January 2020, are misleading.
The website was set up by the National Housing Federation (NHF) as part of a new marketing campaign with the goal of “creating a powerful new narrative for shared ownership”.
In October 2020, Shared Ownership Resources – an information platform launched by former shared owner Sue Phillips – submitted a complaint about the campaign to the ASA.
Ownership of the sharedownership.net website transferred to Keaze Ltd in May 2021.
The complaint
Shared Ownership Resources complained that the NHF ‘myth-busting’ campaign breaches various ASA rules, not least due to potential non-compliance with Consumer Protection Against Unfair Trading Regulations (2008).
The ASA undertook an exhaustive investigation into three specific aspects of the complaint, focusing on the sharedownership.net website.
Firstly, whether ‘part buy, part rent’ terminology, and the claim ‘It’s yours’ were misleading because they exaggerated the level of ownership attained by shared owners.
Secondly, whether the assertion that ‘You can usually staircase… all the way up to 100%’ was misleading given that relatively low numbers of shared owners achieve full ownership via this pathway.
Thirdly, whether failure to explain leasehold extension costs resulted in entrants to the scheme not having all the facts required for informed purchase decisions.
Part buy, part rent
Sue Phillips, founder of Shared Ownership Resources, said: “The ASA ruling that ‘part buy, part rent’ terminology is misleading shouldn’t come as a surprise.
“At least one law firm has previously flagged that it is incorrect, and potentially non-compliant with consumer protection legislation, to describe shared ownership as ‘part buy, part rent’.
“Or, in fact, to use any terminology or slogans that suggest consumers are purchasing anything other than an assured tenancy leasehold interest at any time prior to 100% staircasing.”
Shared Ownership Resources said that this is significant because shared owners are exposed to greater risk, and have fewer protections, than leaseholders more generally.
For example, shared owners face restrictions on subletting and sale, and do not have a statutory right to lease extension.
Staircasing to 100%
The ASA did not consider claims about 100% staircasing to be misleading.
Sue Phillips said: “This is disappointing. Given the significance of staircasing to 100% in order to access the same rights and protections as other leaseholders, it’s essential that homebuyers are clearly informed about the statistical likelihood.”
Responding to a recent government consultation, the Law Society said: “Consumers need to be given full information about the statistics on ownership…and the past evidence indicating that very limited numbers of buyers have vastly increased their shared holding since their initial purchase.”
Lease extension
A 2020 Panorama documentary – The Home I Can’t Afford – exposed issues arising for shared owners encountering unanticipated and costly lease extensions.
The ASA ruling that failure to provide material information on lease extension costs is misleading “will no doubt, raise troubling questions” for shared owners who’ve experienced financial loss arising from short 99- or 125-year leases, according to Shared Ownership Resources.
‘Ruling provides welcome clarity’
Commenting on the overall ruling, Sue Phillips said: “The ASA ruling provides welcome clarity on the requirement for transparency, and has significant ramifications.
“‘Part buy, part rent’ terminology is widely utilised not just by housing associations but also by property portals, mortgage brokers and lenders, and councils.
“It is also likely that other aspects of shared ownership advertising will now come under scrutiny, including affordability claims.”
Responding, Keaze said it believed that describing shared ownership as ‘part buy’, and stating ‘It’s yours’ was not misleading, was in line with how the government referred to the product, and was legally correct.
Lucy Grove, head of External Affairs at the NHF, said: “Sharedownership.net was set up to help provide information and advice to the public about shared ownership homes as an affordable way to get a foot on the property ladder.
“The National Housing Federation handed over ownership of the website and the wider campaign to Keaze Ltd in 2021. Keaze will be implementing the changes needed to comply with the ASA’s ruling.”
Image credit: fizkes/Shutterstock
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