You have to feel a bit of sympathy for Notting Hill Genesis, whose shared ownership advert has been banned following a ruling announced today by the Advertising Standards Authority (ASA).
Unlike dodgy housebuilders selling leasehold homes with doubling ground rents, the housing association’s offer is designed to help people scale the housing ladder.
The Tube advert for a shared ownership property featured the line “I own a 2 bedroom apartment and pay less per month than my friends pay to rent a room in a flatshare!”. Such sentiments are pretty common in shared ownership marketing and, for the most part, are true.
Two close friends of mine – one a designer and one a GP – both own shared ownership properties and their experiences are very much in that vein.
The complaint – which challenged whether the statement of ownership was misleading – was upheld because the ASA said the ad appeared to directly compare “the monthly cost of paying rent to a landlord for a room in a shared home and the monthly cost of paying a mortgage on a property, rather than describing any more complex arrangement”.
Clearly, shared ownership isn’t as simple as renting a room through an agent nor are all schemes the same. The ASA went on to say that “the reference to Shared Ownership in small print only was not sufficient to override that impression.”
There are several interwoven points worth making here. The first relates to the wider leasehold scandal into which this has been dragged. The government only has itself to blame for allowing things to get where they have gotten to, and it’s true that genuine regulation is needed – not simply around agents selling properties but around the legal advice dished out by housebuilders.
Buying a home – or even renting one – is the biggest financial decision most people make. Yet the entire sales process is entirely unregulated. Archaic leasehold rules certainly need updating to ensure people don’t get ripped off either by dodgy ground rents, baseless service charges or some of the terrible instances of freeholders evicting leaseholders under spurious claims.
At the same time, many people living in leased apartments run by honourable organisations like Notting Hill Genesis, and other housing associations offering similar products, exist quite happily within such structures.
It is certainly true that the whole shared ownership offer – particularly as it relates to people selling their stake and moving on – needs to be more transparent and fairer where it relates to opaque “marketing fees” and other such charges.
The level of risk a homebuyer takes on also needs to be made much clearer.
As we will begin to see with many Help to Buy purchases, homebuyers who have bought at the top of the market expecting perpetual price rises may be faced with difficult decisions down the line. Such risks need to be made far clearer and the government certainly has a role to protect consumers.
However, shared ownership is a positive thing and shouldn’t be tarnished by one housing association’s design agency using the wrong font size. Most people reading this advert would have sensed what it was saying. And indeed, in its response, Notting Hill Genesis said customer feedback relating to shared ownership was that the product was complicated, explaining that it had worked with specialist legal and financial advisers to ensure a customer got a fully supported experience when going through the process.
Another thing that could also be more transparent is the ASA itself.
Some travel websites selling hotels in the States, routinely advertise “free Wi-Fi” and “free water” before sneakily charging huge “resort fees” which cover – guess what? – the Wi-Fi, water and hotel amenities, like gyms which are also deemed to be “free”.
Such things have been challenged multiple times and yet wide scale changes are yet to be seen. I would have thought this was more deliberately misleading than a few posters with examples that may or not be completely accurate. Consistency is key.