The Advertising Standards Authority (ASA) has ruled that a housing association advert on the London Underground broke rules intended to protect consumers.
The L&Q poster was headlined ‘Black Friday The Shared Ownership Way’ and incentives included a John Lewis £500 voucher.
‘Black Friday’ is an annual retail event designed to encourage impulse purchases of relatively inexpensive products.
The ASA upheld Shared Ownership Resources’ complaint that the ‘Black Friday’ ad was not fair to homebuyers. They agreed that the ad omitted essential information and that the two-week promotional window did not allow sufficient time for considered decisions.
The ASA said: “We understood that those who took part in shared ownership agreements were usually first-time buyers, who we considered would likely not be as familiar with the property market and the complexities of shared ownership.
“We considered that purchasing a home, whether through shared ownership or otherwise, was a serious, complex financial decision and something which required time and thought from consumers, especially first-time buyers.”
In response to the complaint, L&Q said: “Other property developers and housing associations also offered Black Friday promotions in 2022”.
They explained that “the deadlines for the exchange of contracts and completion were not implemented specifically for the promotion and that they corresponded with the standard timelines for the purchase of a L&Q shared ownership home”.
On the issue of short deadlines, they argued that “by giving consumers a two-day cooling-off period, they gave prospective buyers more protection than the industry standard”.
L&Q also also referred to “a government advice page which stated that reservation fees were unlikely to be returned to buyers if they decided not to proceed with the purchase”.
Commenting on the case, Sue Phillips, founder of the Shared Ownership Resources project, said: “To promote homebuying – one of the most risky and expensive purchases most people will ever make – by high-jacking a marketing slogan associated with TVs, mobile phones, kitchen appliance, beauty products and the like trivialises the decision”.
“If shared owners encounter financial difficulties down the line, they often encounter a ‘caveat emptor’ (buyer beware) response from the social housing sector. It’s not uncommon to be told they didn’t ask the right questions, or that their solicitor is to blame. But the ASA ruling demonstrates that housing associations don’t necessarily give people considering shared ownership the facts they need to make informed decisions, or the time to undertake meaningful due diligence.”
She continued: “Of course, just because a two-day cooling-off period and non-refundable reservation fees are widespread for shared ownership schemes doesn’t mean this is right, or equitable. Shared owners are extremely disadvantaged – they do not have the same rights and access to redress as other homebuyers. For example, shared ownership is still excluded from the New Homes Quality Code published by the New Homes Quality Board (NHQB) in 2021”.
The ASA noted that: “a longer cooling-off period was commonplace when purchasing a new home with a standard mortgage”. The NHQB Code includes a minimum ‘cooling off’ period of 14 calendar days during which the reservation fee must be refunded in full if a customer wishes to cancel the reservation for any reason.
The L&Q ruling represents the second occasion the ASA has upheld a complaint by Shared Ownership Resources. In 2022 the watchdog ruled that the national shared ownership marketing website sharedownership.net (developed by the National Housing Federation and transferred to Keaze during the course of the ASA investigation) used misleading ‘part buy, part rent’ terminology and failed to provide essential information about short leases and lease extension.
In November 2022, the ASA published CAP Executive advice on advertising shared ownership properties. The advice reiterated a fundamental underlying principle of transparency: ‘‘Ads for shared ownership schemes should also make clear any material information that might affect a consumer’s decision to either partake in the scheme or simply to find out more.”
