New build shared ownership schemes give first timers a way in

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.