Is there a role for US style homeownership education in the UK?

Posted on 25 October 2016

Alison Wallace investigates the US experience on her travel fellowship

Housing in the US

New homebuyers with low to moderate incomes should be provided with pre-purchase advice and support, according to Dr Wallace of the Centre for Housing Policy at the University of York.

Alison has recently returned to the UK after spending four weeks in the USA investigating homeownership education and counselling. The travels were enabled by a Winston Churchill Memorial Trust Travelling Fellowship Award, in partnership with the National Housing Federation.

There are indications that new homebuyers in the UK underestimate buying costs, and are unclear about the terms of mortgage products or affordable homeownership schemes. Moreover, households in the lowest income groups are suffering a greater burden of mortgage debt than higher income groups, despite historic low interest rates.

With the UK government committed to a significant expansion of affordable homeownership at the expense of other forms of housing tenures, Alison wanted to use her Fellowship to explore the benefits of interventions to support new homebuyers.

During her Fellowship, Alison visited Buffalo, Albany, Boston and New York City, meeting with staff from not-for-profit course providers, lenders active in the low and moderate income mortgage market and a number of market intermediaries. She also observed one of the classes. The photo belows shows a housing scam warning leaflet.

Housing in the US - foreclosure leaflet

Courses are mandatory for most programs of assistance to help low to moderate income households enter homeownership. They offer eight hours of education followed by individual counselling, and provide information on subjects such as getting mortgage-ready by repairing credit and or saving for a deposit, the buying process, and sustaining their home and investment after the purchase.

“In the USA, there is widespread support for these courses and research does suggest that there are positive benefits to homebuyers. Reconfiguring existing knowledge and skills within the UK housing and mortgage markets to offer new buyers a single point of access to comprehensive neutral advice has the potential to reap benefits for marginal owners, lenders and providers alike” –Alison Wallace

Alison’s Fellowship has convinced her of the merits of pre-purchase education and counselling. Among her recommendations are that, at a minimum, an online course supported by local networks of counsellors should be instituted. Additionally, key agencies such as the National Housing Federation, DCLG, Council of Mortgage Lenders and the Money Advice Service, should convene a working group to consider course content and delivery.

Alison’s findings will be disseminated through existing policy networks, direct contact with key stakeholders, blogs and media articles aimed at housing and mortgage market professionals.

Notes to editors:

Alison Wallace - Profile

Alison’s blog: https://winstonhomesandme.wordpress.com/

alison.wallace@york.ac.uk

Alison has been a Research Fellow with the Centre for Housing Policy (https://www.york.ac.uk/chp/) since 2001. She has undertaken a range of projects for various government, third-sector and private funders, including the Department for Communities and Local Government, Joseph Rowntree Foundation, Shelter, Office of the First Minister and Deputy First Minister Northern Ireland, and Lloyds Banking Group. The projects concern new housing supply, poverty and homeownership, sustainability of residential and buy-to-let markets, the limits and potential of shared ownership and self-build housing. Previously a social housing practitioner, she completed her doctoral research into the cultural economy of local housing markets in 2007.

The National Housing Federation

The National Housing Federation (NHF) is the trade body for housing associations in England. It believes that everyone should have the home they need at a price they can afford. It represents the work of housing associations and campaigns for better housing. Its members provide two and a half million homes for more than five million people and each year they invest in a diverse range of neighbourhood projects that help create strong, vibrant communities. The NHF ensures the ideas and recommendations from the Fellowships reach policy makers and other relevant groups and individuals.

The Winston Churchill Memorial Trust

In total 150 Fellowships have been awarded across the UK in 2016, an investment of over £1.4 million in British citizens. The Fellows will be travelling to 52 countries between them, across 6 continents.

The Winston Churchill Memorial Trust was established 50 years ago - shortly after Sir Winston’s death in 1965. Since then it has awarded over 5000 Travelling Fellowships.

Applications are now closed for Travelling Fellowships in 2017. Those wishing to apply to travel in 2018 can register to receive an alert when applications open. For more details, see www.wcmt.org.uk