It is widely accepted that Shared Ownership is the best way for many cash-strapped first time buyers to get a foot on the ladder; but not many realise that the benefits reach far beyond that initial low deposit. For the first time, whole market research has been conducted into the long-term benefits the scheme can offer. Debbie Clark investigates and explains why, now more than ever, you should aim to be paying off your own mortgage, not a landlord’s!
The long-term financial impact of buying through Shared Ownership, compared to renting privately, has historically been poorly understood due to a lack of publicly available information. However, new research by Leeds Building Society incorporates whole-of-market lending data for the first time and the findings indicate that the monetary gains for shared owners are significant.
Peter Williams, Departmental Fellow in the Department of Land Economy at the University of Cambridge, and co-author of the Taking the Longer View report, states, “It’s clear that on costs alone, Shared Ownership substantially outperforms private renting as a choice for many households on the cusp between owning and renting, and it does so across all regions, including London and the South East. More fundamentally, the full power of ownership is realised when we include capital repayments and the benefit of house price growth on their share. Without any doubt, the majority of shared owners will be materially better off by making this choice.”
The figures – projected over a decade – speak for themselves. Of 294 local authorities, Shared Ownership is forecast to be more affordable than private renting in 93% at year 10 rising from 77% in year one. Furthermore, factoring in capital repayments and expected house price increases on the share purchased – based on conservative assumptions, and in addition to incurring lower monthly costs – shared owners would be on average £29,000 better off as a result of equity growth, rising to £42,000 in London.
As a result of this research, Leeds Building Society is calling on the Government to recommit its support for affordable homeownership by building more Shared Ownership homes through the Affordable Homes Programme. It argues that maintaining a strong Shared Ownership sector is key, not least because it provides low and medium-income households the flexibility to vary the size of property share purchased and alter their mortgage size and deposit.
Andrew Greenwood, Deputy Chief Executive at Leeds Building Society, explains, “The overwhelming majority of people in England aspire to buy a home of their own. It would be a missed opportunity not to recognise the role Shared Ownership plays in achieving that for low and medium-income households. Our independent research shows that Shared Ownership extends the promise of homeownership to more people, and will make the majority financially better off over time.”
Shared Ownership properties are certainly in high demand; a market exacerbated by rising rents which are pricing many would-be owners out of the private rental market. In fact, in a new survey of over 2,200 users on sharetobuy.com, the country’s leading property portal for first time buyers and affordable homeownership schemes, over 83% of budding buyers cited rising rents and increased competition in the rental market as one of their main reasons for buying a home. More than 60% of those surveyed said they believe their monthly payments will either stay the same or decrease once they buy a home.
The figures certainly seem to support this. From January to December 2024, average private rents in England increased by 9.2% to £1,369 per month – £115 higher than 12 months previously. Growth rates were highest in London, which saw average private rents increase by 11.5% to £2,200. In contrast, properties that are listed on
sharetobuy.com offer much lower monthly costs. Currently, the average monthly cost for a one bedroom Shared Ownership home in London is £1,427, and this drops even lower outside of the capital – at an average of just £1,006 per month.
So, whether you are keen to reduce your monthly outgoings or have a 10-year plan to build equity and climb the property ladder, the evidence all points one way – it pays to be investing in bricks and mortar, even if you can only afford a 25% share.
Case Study
Farhana, 25, is now the proud owner of a three bedroom apartment in Royal Albert Wharf, east London, having purchased a 25% share of her home with Shared Ownership. She believes that, without the scheme, “I would still be renting or living with my parents. It gives you a lifeline, especially for someone in their 20s or 30s.”
Raised in east London, Farhana, a history teacher, now works at a school in Barking and Dagenham. She was highly motivated to buy. “I decided I was done losing my money on rent,” Farhana explains. “I wanted to invest in a property, and have a home I could make my own. Shared Ownership really appealed to me because it meant I required a much smaller deposit than if I was buying privately. I’ve stuck to my roots as I grew up in east London but the Royal Albert Wharf community has a modern and stylish twist.”
Farhana was already familiar with the Royal Docks, but her journey to homeownership began with a walk around the area. As soon as she’d seen Royal Albert Wharf and all that it had to offer, she knew she had found the place she really wanted to call home.
There’s an abundance of local amenities at the Royal Docks, and the development is also well connected to the rest of London. Farhana says, “I do travel into central London but often I feel like I don’t really need to, because I’ve got so many things on my doorstep. If I am going into town then I’ll take the DLR as it has so many connections. I shop locally a lot, including at Gallions Reach Shopping Park and also Beckton Triangle Retail Park, both of which are very close.”
Highlights of Farhana’s home include its large windows, roomy balcony and the quality of the interior. However, the thing that Farhana loves most is the tight community. She says, “We have created a great community here and that’s really rare to find, especially as a young person. We have our own residents’ group, which is great as you can get to know other people living here.”
Looking ahead, Farhana likes the flexibility offered by Shared Ownership to increase her share in the future, or to resell her property and buy another home. For now, she is just enjoying her new and improved lifestyle!
HOMES AVAILABLE on the market
PINHOE, DEVON
Moonhill Rise From £119,000*
This collection of 33 new two, three and four bedroom Shared Ownership homes is built to Sovereign’s new house specifications, exceeding national space standards, incorporating increased storage, and promoting lots of natural daylight. Residents will benefit from the local amenities in both Pinhoe and Broadclyst, with the development located just a three-minute drive from Pinhoe railway station. Exeter city centre is also just an 11-minute drive away.
*Based on a 40% share with a full market value of £297,500
sovereignliving.org.uk/developments/moonhill-rise-exeter
01392 252 666
HOUNSLOW
Lampton Parkside From £83,750*
Homes at Lampton Parkside offer private balconies, integrated appliances, energy-efficient underfloor heating and open-plan living spaces. Surrounded by 40 acres of trees, walking trails and tennis courts, as well as the development’s own landscaped communal gardens and leafy streets, Lampton Parkside is just a five-minute walk from Hounslow Central underground station, served by the Piccadilly Line. Heathrow airport is just an 18-minute tube journey away.
*Based on a 25% share of the full market value of £335,000
nhghomes.com/developments/lampton-parkside
020 3925 9105
GREENWICH
Kidbrooke Square From £88,750*
A modern collection of one, two and three bedroom Shared Ownership apartments, these new homes are centered around a new village square, with a café and shop planned. Residents are also located within easy reach of open green spaces including Cator Park, winner of the David Attenborough Award for enhancing biodiversity. Kidbrooke station – just next door – provides efficient transport links into central London, with trains reaching London Bridge in 16 minutes.
*Based on a 25% share of the full market value of £355,000
nhghomes.com/developments/kidbrooke-square
020 3925 9105
Case Study
25.5.24
©Richard Eaton 07778 395888
First time buyers Roberto and Chantel Rocha, both 34, were delighted to secure their new home – a three bedroom townhouse – at Berkeley’s Broadacres development in Southwater, West Sussex. The couple, originally from South Africa, were renting a two bedroom apartment in Reigate before they decided to take the plunge and buy a home of their own.
“Having moved over from South Africa in 2021, we’re still relatively new to living in the UK and don’t have a broad knowledge of different areas,” explains Roberto. However, the couple were immediately impressed by the location of Broadacres.
Roberto, Head of Architecture for a South African company, says, “Horsham is a five-minute drive down the main road, so we have immediate access into the town centre if we need anything. We love our food, so we’re keen to explore the selection of restaurants available in Horsham. Horsham Hospital is also nearby, which will be great when it comes to growing our family, and London is less than an hour away on the train too. We like to call it hybrid living!”
Chantel, an Operations Team Leader for ESP Utilities, particularly loves their new kitchen. She shares, “I enjoy baking and cooking, so I just love our new open-plan kitchen. It means we can chat while I cook, and it’s big enough for us to make pizzas together and spend quality time in each other’s company. It’s the place where all the memories are made; I just love it.” For Roberto, it’s the study. He says, “Now, I have my own dedicated space to work and I can make it into my own man cave!”
The Rochas are now looking to the future in their new home. “Southwater is a beautiful area to live, and if we’re lucky enough to have children we’re looking forward to raising them here. It’s really family-oriented around us – the development itself has a few play areas, but we’ve also got easy access to the sports pavilion that was built by Berkeley for the village, which is the perfect space for children to run around.”
AYLESFORD
The Poppies From £140,000*
Home Reach will offer more than 60 homes at The Poppies for Shared Ownership, with two bedroom homes currently available in both the Cavell house and Medway apartment styles. The homes are highly energy efficient, featuring argon-filled double-glazed windows, electric vehicle charging points and flue gas heat recovery systems. The development is well connected, set close to the banks of the River Medway as well as the M20 motorway and nearby Aylesford and Barming stations. An on-site primary school and doctor’s surgery are well underway.
*Based on a 50% share of the full market value of £280,000
homereach.org.uk/development/the-poppies-hermitage-lane-aylesford-kent
020 3744 0415
EAST CROYDON
Addiscombe Oaks From £102,500*
L&Q’s collection of two and three-bedroom Shared Ownership apartments offer sleek fully equipped fitted kitchens and bathrooms, bright living spaces, and plenty of space for working from home. Every apartment also offers a private balcony or terrace and access to communal gardens. Residents benefit from a video door entry system and shared bicycle storage. The development is conveniently located close to the shops, restaurants and excellent transport links of East Croydon.
*Based on a 25% share of the full market value of £410,000
lqhomes.com/addiscombeoaks
020 8189 7518
READING
L&Q at Bankside Gardens From £70,625*
L&Q at Bankside Gardens is an exciting new neighbourhood within Reading’s Green Park Village, with a collection of one and two bedroom Shared Ownership apartments. Contemporary kitchens feature integrated appliances, including an oven, hob, fridge-freezer and dishwasher, while bathrooms are complete with white sanitaryware, a full-height mirror and a sleek steel bath. Impressive on-site facilities include a concierge, co-working space, cinema, gym and fitness studio. Reading Green Park station is moments away, offering a six-minute commute into the town centre.
*Based on a 25% share of the full market value of £282,500
lqhomes.com/banksidegardens
0333 242 2045
Case Study
Saturday 18th March 2023
2303006
Lampton Parkside, Lampton Road, Hounslow TW3 4FD
Srekanth, 27, is the proud owner of a two bedroom apartment at Lampton Parkside, having bought a 25% share of his new home.
Originally from India, Srekanth had spent a few years studying, then working, in Dublin. When he moved to London to start a new job as a Digital Marketing Manager, he began renting in Hounslow, but was focused on finding a home of his own.
Srekanth was motivated by a desire to host family and friends. He recalls, “In Dublin I couldn’t have my family to stay because I was renting with my friends so it was a bit inconvenient for guests to stay, and when I moved to London it was the same thing all over again.” Srekanth was also looking for green spaces locally. Reflecting on his property search, he says, “I noticed a few developments that were being built, and I looked into their locations, which seemed a bit too busy for me.” In contrast, Lampton Parkside had greenery literally on the doorstep. “I look at it as a luxury, living next to a huge park,” he says. “You leave the house and you are already inside it. I’m excited for my parents to visit so that I can share it with them. They really enjoy going for a morning or evening walk.”
NHG Homes’ Lampton Parkside was recommended to Srekanth by a friend who had already bought a home at the development and he now lives just upstairs! “My friend, who lives in the flat below, told me about Shared Ownership, which really appealed to me,” he explains. “It was a blessing to be introduced to the scheme – without it, I wouldn’t be sat here right now. It meant I could buy my own home, and have my family visit me in London.”
Srekanth benefits from an easy commute. “Hounslow Central is only a five-minute walk and I can catch the Piccadilly Line straight to Holborn. As I was moving to the city for work, the convenience of my commute needed to be one of my first goals – so it’s great that I’ve got that at Lampton Parkside.” Srekanth moved into his new home in February, and is enjoying its open-plan space and high-quality features. He benefits from a concierge service and access to meeting rooms and is enjoying the local amenities. “As a movie buff, having a cinema less than 10 minutes’ walk away is great. I’ve already got a membership.”
GUILDFORD
Tillingbourne Gardens From £88,500*
Tillingbourne Gardens is a collection of high-spec one and two bedroom homes set in the picturesque village of Gomshall. The development is conveniently located just a three-minute walk from Gomshall station, offering direct trains to Guildford and London Waterloo. Local amenities including a small shop, petrol station and pubs are within walking distance, while residents will also benefit from the conveniences of nearby Dorking.
*Based on a 30% share of the full market value of £295,000
abrihomes.co.uk/properties/tillingbournegardensso
0800 145 663
BURTON OPEN TRENT
Dracan Village From £123,998*
Home Reach is bringing a selection of three and four bedroom Shared Ownership homes to Dracan Village, Drakelow Park. The masterplan by Countryside will see a community with 2,000 homes, a community centre, a primary school, a GP and plenty of public open spaces, including a play area. Inside, homes have a contemporary cooking space overlooking an open-plan dining area with French doors to the garden. A separate living room and utility space add to the expansive feel.
*Based on a 40% share of the full market value of £309,995
homereach.org.uk
020 3744 0415
NEWPORT, ISLE OF WIGHT
Three Oaks From £140,000*
The first phase of this large-scale development is anticipated for completion at the end of the year, with 131 properties available over the next three years. The first homes to launch will include three bedroom houses offering a variety of open-plan layouts and carpets and flooring throughout. Sustainability features include EV charging points, air source heat pumps and solar PV panels. All houses come with allocated parking and private gardens. The development is within easy reach of amenities, as well as a selection of cycle routes on the nearby Red Squirrel trail. The development will benefit from improved transport links and a new playground.
*Based on a 40% share of the full market value of £350,000
sovereignliving.org.uk/developments/three-oaks-isle-of-wight
0300 330 0718
CRANLEIGH
SO Resi Cranleigh From £71,875*
Located in a village setting, the one and two bedroom apartments at SO Resi Cranleigh feature open-plan kitchens, living and dining spaces, integrated appliances and a washer-dryer. Residents also benefit from allocated parking, electric vehicle charging points, cycle storage and communal gardens, with Juliet balconies to selected homes. SO Resi Cranleigh is situated on the edge of the village, with local shops and eateries nearby. For transport links, Cranleigh is sandwiched between the A3 and A24 with direct access to the M25. Guildford railway station is a 25-minute drive with services to London Waterloo in just 45 minutes.
*Based on a 25% share of the full market value of £287,500
soresi.co.uk/find-a-property/so-resi-cranleigh
020 8607 0550
First Time Buyer is an exciting bi-monthly glossy which takes a stylish and comprehensive look at all the options available, setting them out in an entertaining and informative way, and helping potential customers navigate their way through what is often a daunting and complex process. We dispel the myths, reinforce the facts and arm the reader with the tools necessary to make their homeownership dreams a reality.
