According to the news today, the recession is over, so isn’t it about time we had some good news on the housing front?
Well here it is – all over the country, people are being helped onto the housing ladder through government-backed shared ownership or equity loan schemes.
Since 2004 the government’s HomeBuy schemes have helped over 70,000 households into home ownership. Currently there are over 170,000 shared ownership homes in occupancy – that’s hardly unpopular.
Melissa Toomey, Head of Marketing for rural affordable housing specialists Hastoe and a member of the homefocus advisory panel, points out that despite the credit crunch, people are still very keen to take advantage of the schemes.
‘The demand for low cost home ownership remains high despite market conditions, especially in rural areas where the opportunity to rent or buy an affordable home is limited,’ she says. ‘At one of our recent developments, Chalfont St Giles in Buckinghamshire for example, all 17 shared ownership properties were reserved almost immediately and demand is still high.’
So what about the criticism that the government schemes, collectively known as low cost home ownership under the HomeBuy brand umbrella, are encouraging people to borrow money they can’t afford to pay back? After all, irresponsible lending was what caused the credit crunch in the first place, wasn’t it?
The fact is that one of the main aims of low cost home ownership has always been to help people buy a home of their own in a affordable way. So, for example, all applicants undergo a thorough assessment of their ability to pay as part of the application process. This means that although applicants are required to buy the maximum share they can afford, the process ensures that they do not borrow more than they can sensibly pay back – in practice that’s normally no more than three or three and a half times their salary.
In fact, far from being irresponsible, it can be said that those who have purchased their homes through the HomeBuy schemes are significantly less likely to default on their mortgage payments.
There’s a popular misconception, too, that the HomeBuy schemes are only available to key workers such as nurses, police officers and teachers. However the truth is that eligibility has now been extended to almost all first time buyers who can’t afford to buy the home they need in the area they want to live in.
The fact is that it’s the ordinary working people earning normal salaries that are effectively being priced out of the housing market. Wanting to buy a home of your own is an admirable ambition. Having the common sense to find a way to achieve that ambition with the support of the government schemes is to be applauded, not criticised or viewed with suspicion.
So the next time there’s some negative publicity around shared ownership, think again. These are solid schemes, backed by the government, that have already made a real difference to people’s lives. Credit crunch or no credit crunch, they could just offer first time buyers a real and affordable chance to move into a home of their own.
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Note for Editors
homefocus is a free publication and website promoting affordable home ownership. Melissa Toomey, Denish Patel and Richard Stone are members of the homefocus editorial advisory panel. They and other panel members may be available for interviews via arrangement.
homefocus magazine is available from housing associations and other housing providers, as well as in local supermarkets etc. To receive a free copy, simply log onto: www.homefocusmagazine.co.uk and go to the Contact Us section
Suzy Boyce is editor of homefocus magazine. If you would like more regular articles on low cost home ownership options in your area, including actual developments on sale now or coming soon, please contact her on 01622 620681 or via e-mail at
suzanne@homefocusmagazine.co.uk.
Additional Information
Government HomeBuy options include:
New Build HomeBuy – previously known as shared ownership or part-rent, part buy. The home owner purchases a share of a property from a housing provider of between 25% and 75% and pays a subsidised rent on the remainder
HomeBuy Direct – a relatively new shared equity scheme, where the home owner purchases a property directly from a private developer. The owner has 100% equity in the property, but only has to pay for 70% through a mixture of deposit and mortgage. The remaining 30% is covered by an equity loan jointly funded by the government and the developer. There is no interest to pay on this equity loan for the first five years.
Rent To HomeBuy – this is another new scheme whereby a prospective home owner who perhaps hasn’t got enough for a deposit can rent the property they wish to buy for a period of up to five years, at a rent of no more than 80% of the local market rate. The home owner can purchase a share in the property at any time in through the New Build HomeBuy scheme. In some cases, part of the rent they have paid is returned to them to add to their deposit or as a discount on the value of the property.
For more information on the HomeBuy schemes go to
www.homefocusmagazine.co.uk Advisory Panel members:
Richard Stone, SPF Sherwins
Greg Warner-Harris – Spectrum Housing Group
Isabel Saville – Concordia Housing Consultancy
Pacian Andrews – Homes and Communities Agency
Dave Lakin – Grand Union Housing Group
Jessica Pike – Homes in Hants
Simon Scott – One Housing Group
Wendy Hegarty – East Homes
Melissa Toomey – Hastoe Housing Association
Trevor Morley – Barnes Morley Solicitors