Shared Housing Schemes Underused
The Halifax Building Society has revealed how first time buyers could be missing an opportunity to get onto the property ladder.
The slowdown in the property market has been widely attributed to the lack of affordable housing, together with the size of deposit lenders are currently asking for. But many homebuyers are unaware of the opportunity shared ownership and shared equity schemes can offer.
Nearly 75% of those asked said they wouldn’t consider buying a house through a shared equity or ownership scheme, but the reality is that such options can provide an affordable alternative. In a shared ownership scheme only a share in the home is actually bought, with rent being paid on the balance. Such schemes can be the first step to fully owning a property. Those taking part in the scheme, are able to pay more money to own the house when they can afford it. ‘HomeBuy Direct’ schemes differ slightly as potential buyers acquire a loan towards the purchase price of the property, with no fees to pay for five years.
The location of a property is often a key driver as to whether a home is right for a purchaser. Over two thirds of Halifax respondents were not aware of any affordable housing schemes in their area. It is a common misconception is that affordable housing schemes are only located in undesirable areas.
Stephen Noakes, Halifax’s Commercial Director for Mortgages, says: "Affordable housing provides a great leg-up onto the property ladder and shouldn't be overlooked. Many people don't know where to turn to find out more about these schemes, or wrongly believe that they aren't eligible, but talking to a housing authority or developer is a good place to start. When it comes to looking for a mortgage, buyers could be surprised to hear that they can usually qualify for a mainstream deal.
"For those who think they are priced out of the market we would encourage them to consider an affordable housing scheme. Once a portion of a home is purchased, most schemes will allow the owner to ‘staircase' - a process that enables them to slowly increase the amount of the home they own - as and when they can afford it, providing valuable flexibility."
If you would like more information about such schemes, speak with our experienced conveyancing lawyers.