Shared ownership could get you on the ladder sooner than you think (Picture: Getty Images)
Despite gloom about the economy, if research is to be believed, many of us are feeling optimistic about our chances of eventually buying a home.
Exclusive research by media planning and buying agency The Media People has revealed that 60% of UK renters aged 25-45 feel that they’ll own a place of their own one day, while 89% of people hoping to buy their first home within the next 18 months believe this is achievable.
Unsurprisingly, affordability is by far the biggest obstacle preventing renters from stepping on the ladder, cited by 70% of those surveyed, yet 62% of them are actively saving for a deposit, although they don’t think they’ll be able to buy until they’re 40.
However, those looking to buy within 18 months expect to get the keys to their own front door at the age of 32, a full eight years earlier.
The scheme makes buying your first home far more affordable (Picture: Getty Images)
This may be due to the fact that they’ve already researched their buying options and realised that shared ownership could get them on to the ladder much sooner than expected.
And, with the Help to Buy equity loan scheme being shelved in March, shared ownership is something all would-be first-time buyers should know about.
Shared ownership tackles affordability head on by radically reducing both the amount you need to borrow and the deposit, compared with buying on the open market.
This means you don’t need such a high income, or such a hefty deposit.
Rather than having to fund 100% of the cost of a home with a combined deposit and mortgage, you can, as the name suggests, buy a share.
More: How to buy a house
Depending on individual financial circumstances, this share is between 25 and 75% of the full market value, although that minimum share will drop to 10% in some instances.
It is repaid via a mortgage, and the balance covered by monthly rent to
a housing association, with the opportunity to purchase more shares later, bit by bit.
And you’ll only need 5-10% deposit on this initial share, which can be far less than £10,000 – as demonstrated by our round up of homes.
There are so many shared ownership developments across the capital that you’re unlikely to have to compromise on location – a factor that 70% of Londoners are concerned about, though two in five are willing to move 11 miles from their current home to purchase a property.
Nearly three quarters of Londoners want to live near transport links compared with 32% across the wider UK, and 44% would strongly consider a new-build home, with energy efficiency ranked as the most attractive feature amidst escalating fuel bills.
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Source by metro.co.uk
