Affordable homeownership schemes that could get FTBs on the property ladder are not well known to those who could benefit from them, research1 has found. While half of FTBs cite affordability as a key obstacle to buying their first home, one in four also believe there is a lack of schemes to support them.
Shared Ownership offers FTBs a more affordable route to homeownership. In this scheme, the buyer purchases a share of a property (between 10% and 75%) from an organisation such as a housing association or local council. The purchaser will then pay a mortgage on the proportion that they own and pay rent on the rest. There is the option to buy more shares of the property in future – a process called ‘staircasing’.
More awareness needed
An advantage of Shared Ownership is that the buyer will usually need to pay a lower deposit as they are only buying a proportion of the property. Since affording a deposit is a key challenge faced by FTBs, the research suggests that information about Shared Ownership should be more widely accessible. Even though 86% of respondents had heard of Shared Ownership, only half could explain what it is.
Hard work and support
Prospective FTBs are going the extra mile to achieve their property dreams. Half of 18 to 24-year-olds living in the capital said they plan to work more in order to afford a deposit. Many have resorted to the Bank of Mum and Dad, with a quarter of 35 to 44-year-olds relying on financial support from their parents2.
Buying your first home can be daunting, but we are here to guide you through the process. We can help you understand what you can afford and advise on schemes that could help you get a foot on the property ladder.
1NHG Homes, 2024, 2HM Land Registry, 2024
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.