In 2020 Shared Ownership Resources argued that that homebuyers deserve greater transparency on risks and long-term costs of shared ownership. The L&Q ‘Black Friday’ campaign suggests the message isn’t getting through.
In September 2022 the ASA published a ruling that the national shared ownership marketing campaign is misleading in key respects. Following a two-year investigation, the ASA found that the website sharedownership.net:
- failed to make clear material risks associated with shared ownership when describing it as ‘part buy, part rent’; and
- omitted essential information about the costs of lease extension.
Significantly, the ASA set a clear benchmark for transparency in their September 2022 ruling:
“not to mislead by omitting information that was likely to be material from their ads, such as information related to the potential risks and costs involved in participating in shared ownership schemes”.
Yet the consumer protection message doesn’t appear to be getting through to the housing sector. As at January 2023 – four months after the ASA ruling – Keaze Ltd has not yet updated sharedownership.net to comply with the ruling. There has been no formal public statement, or thought leadership, on the ASA ruling from any of the major housing bodies. ‘Part buy, part rent’ terminology continues to be pervasive and risks remain understated in marketing materials.
Still it was shocking to discover L&Q promoting shared ownership under the slogan ‘Black Friday‘. It’s a slogan which trivialises one of the most expensive and impactful transactions most households will ever undertake.
The full text of Shared Ownership Resources’ complaint to the ASA follows.
My complaint is that the L&Q ‘Black Friday’ marketing campaign breaches the following CAP Code rules:
1.3 Marketing communications must be prepared with a sense of responsibility to consumers and to society.
3.1 Marketing communications must not materially mislead or be likely to do so.
1.9 Marketers should deal fairly with consumers.
The campaign is delivered via various platforms including London Underground posters, Facebook and the L&Q website.
1.3 Marketing communications must be prepared with a sense of responsibility to consumers and to society
‘Black Friday’ is an annual event to encourage mass retail spending on products such as TVs, mobile phones, kitchen appliances and beauty products. To promote homebuying – one of the most expensive transactions most people will ever undertake – by utilising a marketing slogan associated with inexpensive retail items trivialises the purchase.
In practice – ‘affordable homes’ claims notwithstanding – shared ownership constitutes a complex and risky product (as evidenced, for example, in research published by the University of York’s Centre for Housing Policy in October 2022: Do Affordable Homeownership Schemes Reduce Homeownership Risks for Lower Income Households in England?).
3.1 Marketing communications must not materially mislead or be likely to do so
It is a trope of the housing association sector to claim that solicitors are responsible for explaining potential costs and risks.
However, by signposting homebuyers towards a page on the L&Q website (lqhomes.com/offers/) enabling them to search for shared ownership properties for sale, the advertisements go beyond merely introducing the concept of shared ownership and are likely to influence consumers’ decisions. It is therefore incumbent on L&Q to ensure that material risks associated with shared ownership, which would not exist for those purchasing a property outright, are made clear when promoting the tenure. Yet there is no reference at all to risk in the London Underground posters, on the Facebook post or on the L&Q Offers page.
The L&Q website does include a page with the heading Read our complete guide to Shared Ownership’ However, this page uses ‘part buy, part rent’ terminology alongside a description of L&Q shared owners as ‘owner-leasers’ which appears to be non-compliant with a previous ASA ruling published on 21 September 2022.
(The same L&Q page – under the heading ‘What are the disadvantages of shared ownership’ does explain that: ‘you are still a tenant and therefore need to ensure rent payments happen on time or risk eviction’. However, using the term ‘owner-leaser’ in addition to ‘tenant’ creates ambiguity and is consequently misleading).
1.9 Marketers should deal fairly with consumers
Fairness is of particular significance to shared ownership marketing. The tenure is a publicly subsidised ‘affordable homes’ scheme and, as such, the Government claims ‘fairness’ to be one of its qualities.
Yet the published terms and conditions for L&Q ‘Black Friday’ incentives require homebuyers to: pay a reservation fee of £99 which has a ‘cooling off’ period of just 2 days (and only then if the legal pack has not been sent) and is non-refundable after 22 days; to raise all enquiries within a mere 11-21 days of paying a reservation fee; and to exchange contracts within 28 days of a legal pack being issued. In addition, the various incentives – the reduced reservation fee, the £500 John Lewis E-Voucher, and the contributions towards buying costs or legal fees are not available unless the homebuyer instructs a solicitor and mortgage broker from L&Q’s panel.
Whilst use of panel professionals might facilitate meeting such short deadlines, it raises uncomfortable questions as to whether the imposition of a 28-day deadline in the first place, alongside a requirement to use L&Q’s favoured professionals in order to access advertised incentives, constitutes fair dealing with consumers.
By way of comparison, the New Homes Quality Board (NHQB) Code of Practice (from which shared ownership is currently excluded) requires a mandatory 14 calendar days cooling off period, and that exchange of contracts must be not less than not less than six weeks after reservation unless the customer requests an earlier date.
Submitting a complaint to the ASA
Are you concerned about shared ownership ads you’ve seen? You can submit online complaints to the ASA here.
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