Part-buy hope for ‘still-struggling’ 1st-time buyers
GETTING onto the property ladder is still a struggle for many
younger people − despite the better lending conditions that
have led to a sudden rise in the number of first-time buyers.
High property prices and big deposits − often running into
tens of thousands of pounds − remain the biggest obstacles for
many would-be buyers who can't rely on financial support from
what's commonly known as the Bank of Mum & Dad.
So says Bev Hall, Sales and Marketing Director of Bromford
Homes, in response to reports from the Council of Mortgage Lenders
and others highlighting a huge increase in the number of first-time
buyers this year.
Bev welcomes the first-time buyer comeback and improved lending
conditions but highlights the fact that, for many singletons,
couples and young families, buying a first home on the open market
remains unaffordable. Their best hope of getting onto the property
ladder, she says, is the part-buy, part rent route − also
known as shared ownership.
"Now is arguably the best time since the economic crash for
would-be homebuyers to stop renting or leave the family nest and
take their first step onto the property ladder," Bev tells would-be
"Interest rates remain at an all-time low, lenders are starting
to relax a little − and, as a result, the number of first-time
buyers is rising, as reported by the Council of Mortgage Lenders,
the Halifax and several others.
"On the other hand, open market house prices remain out of reach
for many ordinary hard-working people, with most lenders expecting
deposits that run into tens of thousands. That's why so many
first-time buyers have been saying yes to shared ownership over the
last few years − and why we encourage more would-be homebuyers
find out if they too can see their property dreams come true at a
price they can truly afford."
How does it work? Instead of buying your new home outright, you
buy between 25% and 75% − the amount depends on what you can
afford − and pay low rent on the remaining share.
A key plus for many young buyers is the much lower deposits that
are typical with shared ownership − as little as £1,532* for a
minimum 25% share of a two-bed house costing £30,625* at our new
Colliers Green development (pictured above) near Coventry. Total
monthly housing costs are also typically cheaper with shared
ownership than they are with outright sale and private
"We know from talking to first-time buyers that this part-buy,
part rent formula makes all the difference to hard-working people
stuck in 'Generation Rent' − especially those who can't rely
on financial support from the Bank of Mum & Dad," says Bev.
"Shared ownership allows them to realise their dream and take
that crucial first step onto the property ladder at a price that
they can afford and enjoy living in a new Bromford home with all
the mod cons. Customers tell us that they feel more secure than
they do in rented housing and they love being able to make the home
their own by decorating it the way they want.
"It really is a win-win deal − and you don't just have to
take my word for it. Listen to what our customers have to
say − first-time buyers like Matt and Clare (pictured above),
who've bought just over 50% of their home at Larks Rise, Coventry,
and are so happy with shared ownership that they agreed to feature
in a promotional video.
"Or Claraine (pictured below),
another first-time buyer who had just about given up hope of
getting onto the property ladder until she found out about part
buy, part-rent. We've got many more examples like this − and
I'm sure that we'll have many more as young buyers take advantage
of the better lending conditions and the affordability of shared
* With shared ownership, £30,625 would buy a minimum 25% share of
a two-bed house with a full market value of £122,500. A minimum
deposit of £1,532 assumes a 95% mortgage on that minimum share.
20 September 2013