Happy to Be Here; Forget the Debates, Shared Ownership Is Loved by First-Time Buyers, Says a New Survey. Sara McConnell Reports

The Evening Standard (London, England), November 30, 2005 | Go to article overview

Happy to Be Here; Forget the Debates, Shared Ownership Is Loved by First-Time Buyers, Says a New Survey. Sara McConnell Reports


Byline: SARA MCCONNELL

THE biggest attraction for buyers of share d -ownership schemes is that they can take a stake in the property market rather than pouring money into a landlord's pocket.

New research carried out by Cambridge University on behalf of two of London's largest housing associations reveals that 84 per cent of Londoners buying their first property through the associations' sharedownership schemes did so primarily because they wanted to own at least part of their home.

One new home- owner told researchers for Tower Homes and Metropolitan Home Ownership: "It's allowed me to join the home-owning masses." Another said: "We own 25 per cent of the property and we consider it ours. The fact that it is shared ownership doesn't affect how we use it."

Shared-ownership schemes allow first-time buyers and keyworkers on low or average incomes to get a foot on the property ladder by buying part of a property, usually between 25 per cent and 75 per cent, and paying a subsidised rent on the remainder.

Apart from owning a stake in their properties, shared-ownership buyers could see the value of their investment increase in a rising market, say researchers. They calculate that someone buying a 25 per cent share in a [pounds sterling]180,000 property for [pounds sterling]45,000 could make more than [pounds sterling]20,000 on their investment over four years, based on historical UK average property price inflation of eight per cent a year.

This is the first time buyers in shared-ownership schemes have been asked why they decided to buy their homes this way. Kevin Jones, assistant director of Tower Homes, says: "This is the first survey looking at real-life experiences both of people who have just bought and those five years on."

Other attractions of shared ownership include the chance to move into a better-quality property, with 82 per cent of households saying this was a very important or important factor in their decision to buy.

Most shared-ownership homes are new-build properties.

However, buyers considered other potential advantages of shared homeownership, such as reducing housing costs or being able to move to a better location, less important than the chance to invest in a newly built home.

For thousands of Londoners, shared ownership is becoming an increasingly popular choice. With the average cost of a London property nearly [pounds sterling]250,000, many would-be buyers on the average London salary of [pounds sterling]33,000 cannot afford to buy on the open market.

But housing associations say the average income of shared-ownership buyers is [pounds sterling]29,000 and they are selling to people on incomes as low as [pounds sterling]23,000.

East Choice, which operates in East London and the Thames Gateway, has sold 185 properties in the past year to people with an average income of [pounds sterling]23,000.

It is selling one-bedroom flats in a development of 13 apartments in Kirkdale Road, Leytonstone, for [pounds sterling]72,000 for a 45 per cent stake of the [pounds sterling]160,000 full sale price. Local people will be given priority.

Other shared-ownership schemes give priority to keyworkers such as teachers, nurses and policemen. Such schemes are enthusiastically promoted by the Government, which is under pressure to provide more affordable homes for essential workers, especially in expensive cities such as London.

Demand from keyworkers has escalated sharply over the past year as housing associations target specific groups. …

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Happy to Be Here; Forget the Debates, Shared Ownership Is Loved by First-Time Buyers, Says a New Survey. Sara McConnell Reports
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