As the Government’s Help to Buy: Equity Loan scheme comes to an end, could shared ownership be a good alternative for first time buyers? Stuart Hensby, Sales and Marketing Director of Abri Homes looks at the situation
In an increasingly uncertain housing market, Abri recognises the growing affordability challenges faced by first time buyers. We’re working to mitigate these by providing high quality but affordable properties that give everyone the chance to get on to the housing ladder and have a place of their own to call home.
With the Help to Buy: Equity Loan scheme now closed to new applications and ending altogether at the end of March 2023, Shared ownership is edging even further into the spotlight. But what are we, as housing providers, doing to get more people on to the property ladder?
Our construction of properties for sale through shared ownership means customers can initially purchase a share of their property using a mortgage, and then pay an affordable rent on the remainder. This method of buying a home is set to play an increasingly important role as prospective buyers grapple with the cost-of-living crisis and rising interest rates. We genuinely believe that, for many people, this sensible stepping stone means the dream of homeownership will remain achievable.
The other positive thing about shared ownership is that, over time, customers can buy further shares in their home, which means they gradually own more and more of it. This is called ‘staircasing’ and it’s made even more attractive by the fact that the more shares you own, the less rent you pay. For most properties, you can ultimately buy 100% and you then become the outright owner. That would mean that your rental payments would stop altogether, and you’d just be paying off what was left on your mortgage.
With deposits starting at 5% of a home’s value, shared ownership can be a more affordable option to buying a property outright and, crucially it’s an option that remains accessible for first time buyers despite housing and mortgage market uncertainty. A great example of this is our Violet Cross development in Sturminster Newton. Shared ownership prices there start at just £95,375 and you’ll have the village hall, a café and pub right on your doorstep, as well as open fields that lead to the stunning Dorset and Somerset countryside.
Of course, Abri recognises that our customers are facing a lot of economic challenges at the moment but we believe that buying your first home shouldn’t be something that you have to sacrifice. With shared ownership open to anyone over the age of 18 who has a household income of less than £80,000 (outside of London), it’s a realistic option for first time buyers, whether you’re looking to move on from your parents for the first time, or take a step away from renting towards owning your own place.
Shared ownership has been around for over 40 years, meaning a lot of people have used it as a way to buy their first home. As more and more people take advantage of using shared ownership, it has become the mainstream buying option of choice for those that need a little bit of help to get on to the housing ladder. Ultimately, it is a great alternative to purchasing on the open market, which presents challenges to people seeking to buy properties across the country.
The Help to Buy: Equity Loan scheme has helped a lot of people buy their first home and its loss may leave potential buyers worried that home ownership is now out of their reach. But shared ownership is a great idea too. We think it’s just as good an option for people who want to take that first step towards owning their own home and we’d strongly encourage people to find out whether it could be right for them.
For more information visit abrihomes.co.uk
