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Affordable home ownership by the numbers

Shared ownership's low deposits and manageable monthly costs are more important than ever for priced-out buyers, says our Head of Sales ALAN BRADLEY, as the average first home price hits a new high

Alan Bradley 640x340

NEW statistics highlight the true affordability of our shared ownership homes for cash-strapped homehunters who are frustrated by rising property prices.

The average price paid by first-time buyers is up by almost 14% over the last year, says the latest report from the Office for National Statistics, and that figure now stands at an eye-watering £209,000.

Compare that with the average price paid by a Bromford shared ownership customer − most of them first-time buyers. It's just £83,131, or less than 40% of the national figure.

Then compare the latest statistics for typical first-time buyer deposits. The overall average, according to another survey by the National Housing Federation, is a whopping £30,000. That's roughly the same or slightly more than a year's pre-tax wages for a typical nurse, firefighter or plumber.

The average deposit for a Bromford shared ownership buyer? It varies quite a lot because some of our homes are built in high-price property areas like Solihull or Cirencester but, for most of our first-time buyers across central England, the minimum  figure is somewhere between £3,000 and £5,000.

Pennylands 960

In fact, a minimum 5% deposit for someone paying the £83,131 average for a Bromford home like the one pictured above would be just £4,157. That's a truly affordable amount for ordinary working people who want to see their homeownership dream come true − especially if they can't, like two-thirds of today's first-time buyers, rely on help from the Bank of Mum & Dad.

It's this figure − the deposit − that really makes the difference for aspiring homeowners. We know that because they tell us so. That and the fact that shared ownership's unique part-buy, part-rent formula enables them to commit to a mortgage that they can actually afford whereas buying outright is simply beyond their reach.

It's also worth saying here that total monthly payments for our buyers − including low rent for the share that you don't buy − are typically around the same or even less than you would pay to rent a similar home from a private landlord. Surveys confirm this and so do first-time buyers like Thomas (pictured below) in Cheltenham, Anna in Rugby and Deborah in Solihull.

Thomas Turner with keys

Now private renting may well be the right option for, say, young singletons who are often more mobile and may want to make the most of that freedom to switch jobs and move to another town or a different part of the country.

But our customers are priced out by open market property values and most simply want the chance to stay in the village, town or city where they've grown up, the place where their friends, families and jobs are. Or they want the chance to put down those roots so that they can start a family or make sure their children can stay at the same school without having to worry about a private landlord giving them notice to move on.

Our customers want the freedom to paint their walls with the latest must-have colours, to entertain friends, make the most of their gardens during the summer and enjoy the benefits of a well-insulated, energy-efficient modern home in the depths of winter.

Isn't that, after all, what a home of your own is really all about? Somewhere cosy, secure and really liveable that won't break the bank?

Anna with Mia 640x340

Yes, homeownership is also generally regarded as a good long-term investment. First-time buyers like Thomas, Anna (pictured above) and Deborah all see it that way and tell us that they hope to increase the share they own as and when they can afford it.

We, of course, support them in that ambition but the decision is theirs and has to reflect their future financial circumstances. The key word to remember then as well as now is affordable.

You can find out more about shared ownership and developments in YOUR area by calling us on 0845 60 10 878. You can also register for updates or follow us on Twitter and Facebook.

For more about the latest house price figures, read this national newspaper report based on the ONS statistics or the NHF Broken Market, Broken Dreams report.

19 September 2014