As of April 2018, the government have relaxed eligibility rules meaning households earning less than £80,000 and £90,000 in London can now use shared ownership schemes to own property. When the average national price of an entry level property now costs £140,000 should the first-time buyer look towards government shared ownership schemes as a first port of call more frequently in the future?
Achieving the life-goal of 'homeowner' is becoming incredibly difficult for first-time buyers, according to a recent report made by the credit experts, TotallyMoney. How can first time buyers grasp a secure footing on the property ladder when the price of entry levels homes has increased by 20% over the past decade? One possible solution lies in government shared ownership schemes.
However, the report has highlighted a naivety in first time buyers' knowledge of what a shared ownership scheme actually is; with only 28% of 18-24 year olds having any understanding of the government scheme. Should the public be more aware of shared ownership and is this the future when buying a house for the first time?
Despite being an affordable option, the confusing reputation of shared ownership schemes continues to resonate and deter first-time buyers. Whilst the people eligible to use shared ownership have increased, 38% of people surveyed by TotallyMoney would not consider a shared ownership scheme for fear of hidden costs. Giles Peaker, a housing solicitor at Anthony Gold solicitors, said "Despite owning 25% or 50% of the property, buyers have responsibility for 100% of the service charges. These can be varied and have to be paid on top of rent and mortgage."
Even though this form of housing ownership should become a more popular option among first-time buyers, many are struggling with the confusing quagmire of stipulations once they use the scheme. Unless hidden costs become more transparent, unreasonable restrictions are relinquished and the scheme is promoted more successfully to a wider audience, it could struggle to help the 40%o of first-time buyers, currently reliant on financial support from friends and family, to buy their first home.
If you are thinking of buying a shared ownership property, give our Property Team a call on 01606 74301.