by Mark Johnston
It seems that in todays financial climate the property market has been forced to come up with new ways to get the housing market moving again. According to recent research forty-six per cent of those buying a home for the first time are turning to shared ownership or shared equity schemes.
“Ideally people want to buy in the traditional way, without the complexities of shared equity or shared ownership – or even joint ownership (buying with a friend or family member) and with property prices not going up, there isn’t the desperation to get onto the first rung of the property ladder as there was five years ago,” says Helen Adams of First Rung Now.
This specific research also shows that one in four of those first time buyers that were considering shared ownership and shared equity schemes said it was their only option if they were to get a foot on the property ladder and that without the schemes they would have no hope of being accepted for a mortgage on the open market.
According to research by Lloyds TSB, one in six first time buyers who would have previously discounted the schemes have since changed their views in light of the economic downturn.
Other research on this subject found that there is a general lack of awareness surrounding the availability of local schemes, which in itself therefore creates further hurdles for first-time buyers.
Housing Minister Mark Prisk said that “The Government is taking action to help aspiring home buyers take their next step on the property ladder – whether it is first time buyers looking to purchase their first home, or existing homeowners who want to move in order to meet their changing needs”.
Stephen Noakes, director of mortgages at Lloyds TSB, added: “Affordable housing schemes play a key part in helping first time buyers on to the property ladder, and our research shows that almost half of them would now consider signing up to buy their first home. However, many more may be unaware of how these schemes can help them on to the property ladder, or indeed the availability of them in their local area.”
Shared ownership appears to be the most widely understood scheme among first time buyers, with 81 per cent of them saying they have ‘a good grasp of what is involved’. Although the same can not be said for shared equity schemes. Only 64 per cent of first time buyers were able to confidently say they understood what was involved.
“People are quick to make assumptions about shared ownership, but the benefits are clear,” says Kush Rawal from Thames Valley Housing. “It is especially so now, when mortgage finance is restricted and property prices, particularly in and around London, are unrealistically high for many first time buyers.”
All of these particular Government schemes have been introduced in order to kick start the market from the bottom up, but so far, it seems that the take up has been poor.
Some experts feel that the problem remains, however, that all of these schemes are only available to key workers, or first time buyers with an annual income of less than £60,000. They can also be complicated and expensive.
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