Halifax has revealed that first time buyers could be missing an opportunity to get onto the property ladder.
The property market’s slowdown has widely been attributed to the lack of affordable housing and the size of the deposit lenders currently require. However, many homebuyers are unaware of the opportunity that shared ownership and shared equity schemes offer.
Nearly three quarters of those asked said that they would not consider buying a house through a shared equity or ownership scheme, but the reality is that such offerings provide an affordable option. In a shared ownership scheme only a share of the home is actually bought, with rent paid on the remaining part. Such ‘HomeBuy’ schemes are a first step to fully owning a property. Participants pay more money to own the house outright when they can afford it. HomeBuy Direct schemes differ slightly; potential buyers get a loan towards the home’s purchase price with no fees to pay for five years.
The location of a property is for most buyers a key driver behind the decision of whether that home is right for them, and 68% of Halifax respondents didn’t know about any affordable housing schemes in their area. A common misconception is that affordable housing schemes are located in undesirable areas. However, there are plenty of new developments and communities with a large portion of owner-occupiers located in areas people actually want to live in. Buying a shared ownership or equity home could enable house hunters to live in an area they otherwise couldn’t afford.
Stephen Noakes, Halifax Commercial Director for Mortgages, comments: “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.”
As a first time buyer if you decide to enter into the property market using such a scheme call Mark Sadler, our experienced conveyancing solicitor, for further advice and a quote on your purchase. Tel: 01708 757575 or email: firstname.lastname@example.org