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Stepping onto the housing ladder through Shared Ownership with L&Q
Recent research has revealed the age the average first time buyer steps onto the property ladder is ever increasing. Amid rising interest rates and a cost-of-living crisis, those looking to buy their first home are struggling to afford a deposit, with 70% of potential purchasers deciding to delay until they feel more financially stable.
However, there are several more affordable routes to homeownership that house hunters should explore. One of which is Shared Ownership, a government backed scheme that allows individuals to part-rent and part-own a property. The benefits of the scheme include:
1. A smaller deposit
As the purchaser is only buying a share of the property, and paying rent on the remainder, the deposit required tends to be a lot less than it would be on the open market. For example, at L&Q at Hayes Village, a deposit of just £5,748 is required to purchase a one bedroom studio home, which is substantially less than the average London deposit, reported as £61,000 by Mojo this year.
2. More affordable monthly payments
The monthly payments required in a Shared Ownership property tend to be less than monthly rent would be in a similar location, due to the lower mortgage amount and reduced rent paid to the housing association. For example, minimum monthly payments at L&Q at Brunel Street Works equate to £731, which is drastically more affordable than the average London rent for new tenancies of £1,832 a month according to HomeLet.
While many purchasers of new builds start with owning 25% of their home, the opportunity to staircase can enable these individuals to buy a larger portion of their property. As and when buyers can afford to do so, they can purchase more shares, meaning the amount of rent paid to the housing association will go down, and buyers will pay more towards their mortgage. When they own the home outright, they will pay no rent at all – just their monthly mortgage payments and any relevant service charges.
4. Style your home, your way
One of the main attractions of buying a brand new home, which all L&Q’s Shared Ownership properties are, is for homeowners to be able to inject their own personality into its decoration and furnishings from day one, using the neutral walls, floors and integrated appliances as a base to create a truly unique character in every room.
5. Help the environment
Recent research by Unlatch has highlighted that new build homes benefit from 51% more affordable energy bills than less energy efficient second hand homes. Buying a new build through Shared Ownership can save the purchaser money on bills, as well as monthly payments, equating to a more affordable way of living in their dream property.
To find out more about Shared Ownership, click here.
Juliet’s Shared Ownership experience
One first time buyer who used Shared Ownership to buy her dream home, surrounded by greenery, with parking and a residents’ gym, is Juliet Aitken, who bought a 25% share of a one bedroom apartment at L&Q at Regency Heights.
As she recalled; “My initial search started and ended fairly abruptly – I kept getting turned down due to affordability. It seemed like you either had to be making more than the average person or have a joint income, and I just wondered how are single people supposed to buy homes?
“Shared Ownership seems to be aimed at normal people with normal incomes – it was the monthly affordability and the low deposit that just made sense.“
Considering her future in her Shared Ownership home, Juliet explained; “It’s a complete haven and has its own community. I just had a good feeling and went with my gut and I’m so glad I did.”
Looking for a new place to call home? Visit L&Q’s website explore the full range of L&Q Shared Ownership homes available across the UK.
Attend the London Home Show
Tickets for the London Home Show are free, but visitors must register in advance to attend. For more information, or to reserve your place at the capital’s no.1 first time buyer event, please visit the Eventbrite page.
Share to Buy is a one stop shop for affordable homes. On our website, you can search for properties, compare mortgages and find out all you need to know about alternative home buying schemes such as Shared Ownership and Help to Buy via our FAQs and guides.