Newspaper article The Evening Standard (London, England)

SALES ON A RIVER BANK... Part-Equity Deals Give Young Buyers a Share in Their Home and That Important First Step on the Housing Ladder, Says David Spittles

Newspaper article The Evening Standard (London, England)

SALES ON A RIVER BANK... Part-Equity Deals Give Young Buyers a Share in Their Home and That Important First Step on the Housing Ladder, Says David Spittles

Article excerpt

Byline: David Spittles

FIRST-TIME buyers are being offered the chance to purchase a twobedroom duplex apartment in Docklands for an initial cash price of only [pounds sterling]34,375, or 12.5 per cent of the market value. There is no catch. This enticing shared-ownership deal, offered by Assettrust Housing, a private company, is a mortgage-free solution for young buyers who want to get on the property ladder.

Full-ownership prices at the development, which is called The Forge, start at [pounds sterling]275,000.

Part-equity buyers will have to pay rent and a monthly service charge -- a total of [pounds sterling]681 per month. But this is considerably cheaper than the cost of purchasing the apartment outright, which is likely to be set at about [pounds sterling]1,630 a month.

The deal is unique because sharedownership flats for sale elsewhere in the capital require buyers to purchase an equity stake of at least 30 per cent.

The 12.5 per cent must be paid in cash (not with a mortgage raised on the property). Some would-be first-time buyers may already have saved this amount. Assettrust believes the scheme will appeal to parents who have already committed to providing a deposit to help their offspring buy a property.

According to the Council of Mortgage Lenders, 55 per cent of first-time buyers get financial help from their family, or "the bank of mum and dad". The average deposit required to get on the housing ladder is [pounds sterling]55,700 -- down from [pounds sterling]66,900 at the beginning of 2009 -- an amount equivalent to 1.74 times the gross pre-tax income of the typical first-time buyer.

The number of first-time buyer mortgages has dropped by 17 per cent since January 2009, reports comparison website Moneyfacts.co.uk. There are just over 100 mortgage deals available to borrowers who need more than 90 per cent of the purchase price, and only two for 100 per cent deals.

By contrast, the number of loan deals aimed at buyers with a 40 per cent deposit has soared since the credit crunch started to bite in July 2007, rising from 17 to 320. "A 25 per cent deposit is the level at which most lenders are prepared to do business," says Moneyfacts's Michelle Slade.

FIRST-TIMERS FORGE AHEAD The Forge is a new 190-apartment complex near Canary Wharf. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.