Bills are rising and rents are soaring, but the news isn’t all bad for anyone
aspiring to get on to the housing ladder. Interest rates have fallen, making mortgages cheaper.
Rightmove reports that the average first-time buyer pays nearly £100 a month less a month than this time last year.
Further, according to analysis by estate agency Hamptons, the share of homes bought by first-time buyers is creeping up. In August they accounted for a third of all sales nationally and over half of those in London.
Yet the fact remains that many potential purchasers don’t earn enough to borrow what they’d need to buy on the open market, or save a large enough deposit, making owning a home frustratingly out of reach.
To mark Shared Ownership Week, which runs until September 30, Metro takes a look at the schemes helping those getting on the property ladder save an average of almost £100 a month.
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More affordable
Fortunately there is an alternative and flexible route on to the property ladder: shared ownership.
You buy a share you can comfortably afford – usually from 25 to 75% of the purchase price, but occasionally as little as 10% – paid for via a mortgage and pay subsidised rent to a housing association for the part you don’t own.
Should you want to buy yourself a bigger share as your circumstances change, you have the freedom to do so. Another bonus is the cost advantage over renting or buying outright.
Specialist lender Pepper Money has calculated that on buying 40% of a £300,000 shared ownership home with a 10% deposit of £12,000, your mortgage, rent and service charge add up to £1,041 a month.
For full ownership, a 10% deposit would be £30,000 and the monthly mortgage and service charge come to £1,509. At £1,725 pcm, average rent is even higher, though obviously this figure varies greatly around the country.
More secure
But whatever you choose, the other benefit – and for many a renter has found themselves out on their ear at short notice – you have peace of mind that comes with knowing the place is yours and you won’t be booted out on the whim of a landlord.
And it’s not just for first-timers
Although 88% of shared ownership sales are to first-time buyers, the scheme is open to people who’ve previously owned a home, and existing owners wanting to upsize but can’t otherwise afford to do so.
Applicants must be creditworthy with a household income of no more than £90,000 in London or £80,000 everywhere else, and all ages are welcome.
During Shared Ownership Week, Metro Property has a special guide dedicated to this affordable way of buying that has proved valuable for so many people who considered themselves priced out of the south-east property market.
As part of Metro‘s focus on shared ownership, you’ll find properties with deposits of less than £5,000 (yes, it really can be done), and we’ll catch up with some homeowners to talk about how they used shared ownership to realise their home ownership dreams.
Shared Ownership Week runs until September 30. For more information, visit the Shared Ownership Week website for more at sharedownershipweek.co.uk.
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