For many first time buyers the property market is simply not worth the hassle. However, shared ownership schemes are becoming more popular and for individuals looking to make those initial steps; it can be the only feasible option.  

Although initially developed to help people buy their council house, the schemes have undergone a transformation. They are now attracting young professionals who were ordinarily priced out of the property market. Purchasing a new build with one of the improved shared ownership schemes, enables first time buyers to climb on the first rung of the ladder without compromising on the all important location location location (not to mention fabulous interiors).  

New builds (already increasing in popularity with first time buyers) are upping their profile with shared ownership schemes directed at those otherwise unable to get on the property ladder. First introduced in 1990 specifically for key workers such as nurses, teachers and police officers; these schemes have since had their boundaries widened to include professionals on a low to moderate income. They work in much the same way as buying shares, and allow the consumer to rent and buy at the same time. The buyer initially purchases 25 – 75% of a property and can then acquire the rest in stages; a process which is known as ‘staircase buying.’ 

In a captivating twist, shared ownership schemes reduce exposure to rising interest rates and are available to buyers with a household income of up to £52,500. As first time buyers shy away from other forms of mortgage, banks and building societies are looking for new ways to attract them. Yorkshire Building Society, for example, has collaborated with the government to reach first time buyers and is offering interest free loans of up to 15% of the property for the first five years; whilst the government proposes a further loan of 17.5%. 

With property prices soaring - the aim is to keep those all important first time buyers in the market, (all important because without them there are no second time buyers and so on and so forth). The innovative combination of buying off plan and shared ownership is, for many, the only chance to buy their own home. And combined with the increased popularity of new builds, these schemes provide a potential ‘double whammy’ to get first timers back in the game. All in all, the off plan market is set to thrive.

India’s real estate market is growing by leaps and bounds. Growth and development has pushed India’s financial and commercial capital, Mumbai, to being one of the most expensive cities for setting up office. New Delhi, figures on the top ten list as well, coming in eight. London tops the list according to research conducted by Real Estates Broker firm CB Richards Ellis.

While this illustrates the development and growth of the economy, it also shows that there is definitely a dearth for office space. Moreover because of such high rates, investors should think twice before investing in Mumbai or Delhi. The cost in square feet at Mumbai’s Nariman Point has risen 55 per cent over last year to $189.51 (occupation cost in US $/sq ft/annum).

So, what is the general consensus out there? Many are not too happy with the news. Of course this means shelling out more dough. And no one in their right frame of mind would want to do that. Most of us do not trade in property, but we would need the extra space for expansion of our business. This will squeeze liquidity and cash flow. The government needs to take charge, develop more infrastructure, reduce property prices.Moreover, Mumbai will loose out with all the BPO’S and KPO’S who won’t be able to afford the high rents and so will set up base in smaller cheaper cities.For now, the bottom line is - you might want to think twice before setting shop in Mumbai or Delhi since obviously setting up an office in Dubai or New York is cheaper. Tsk!Tsk!

Most Expensive Commercial Space by City

(Source: CB Richard Ellis Global Research report Global Market Rents, November 2007.)