Part-buy’s low-cost answer to deposit worries
SHARED ownership can help would-be homebuyers break through two
of the biggest stumbling blocks that stand in the way of their
Saving a deposit remains by far the biggest obstacle for
potential first-time buyers, according to a new survey of current
renters, and the second major worry is being able to afford the
monthly mortgage repayments.
Both costs are made much more affordable with our part-buy,
part-rent scheme, says Bromford Homes Alan Bradley, and buyers like
shared ownership case study couple
Matt and Clare (pictured below) clearly agree, with sales
completions this year hitting a record high of well
over 200 across central England.
A typical shared ownership deposit on a new Bromford home is
around £3,000* − less than half of what it would cost if
buying a similar home on the open market. And the total monthly
cost of our part-buy, part rent package is typically cheaper than
the cost of renting a similar home from a private landlord −
by almost £100 a month for the typical two-bed apartment quoted in
another recent survey**.
"Shared ownership adds up to a real win-win deal for first-time
buyers − with low-cost solutions to both of the major concerns
that trouble them the most and stand in the way of making their
home ownership dream come true," says Alan. "This is a really
positive message for would-be homebuyers on lower incomes,
especially those who feel their only option at the moment is to
rent their home from a private landlord."
According to the just-published survey of YourMove and Reeds
Rains*** renters, an overwhelming 96% of tenants registered with
them want to become homeowners. But six out of ten of those tenants
say that building up a purchase deposit is an uphill struggle and
the biggest factor that prevents them from buying, while the second
most common concern is having enough income to support mortgage
"These concerns reflect the views and experiences of many of the
200-plus first-time buyers that have gone on to see their property
dream come true this year thanks to shared ownership with
Bromford," says Alan. "They tell us that the low deposits make a
huge difference and that the total monthly costs add up to less
than it would cost to rent from a private landlord."
A typical example is first-time buyer Thomas
Turner, who strongly recommends share ownership to others
having moved into his two-bed part-buy, part-rent home at St Mark's
View, Cheltenham, last summer.
Deposits and purchase prices are much more affordable with
shared ownership, he confirms. "It's ideal for first-time buyers
like me who want a house that they can make their own and don't
want to wait until after they have saved up the enormous deposit
that lenders require for an open market sale," says Thomas,
Smaller mortgage payments plus low rent also add up to a real
win-win deal − and are typically less than than private renting.
"Overall, I know I pay less each month than friends in the
Cheltenham area who rent apartments and, unlike me, they are not
going to get anything back over time," says Thomas. "I always
advise people that shared ownership is a brilliant way to get
started on the property ladder."
* In the case of Colliers Green (pictured above) in north
Warwickshire, your deposit can be as little as £2,757. That
assumes a 95% mortgage when buying a typical 45% share of a two-bed
house with a full market value £122,500. That 45% share costs
£55,125. In another typical example, Greyfriars House in
Lichfield, your deposit on a two-bed apartment could be just £3,098
if buying a typical 45% share for £60,750. The actual amount you
buy depends on your financial circumstances but 45% is fairly
typical and the maximum share is 75%. You pay low rent on the
** It costs £520 a month to rent a typical two-bed apartment in
the Shropshire town of Telford, according to a comparison
published by HomeFocus magazine. That's £93 more than
it would cost someone buying a 50% share of the same £105,000
apartment through shared ownership. The same cost comparison also
reveals that shared ownership is cheaper − by £57 a month − than it
would be for someone buying that apartment through the Help to Buy
80% equity loan scheme.
*** Find out more about the findings of the survey with Your Move and Reeds Rains
To find out more about shared ownership and
Bromford developments across central
England call 0845 60 10 878 or register for updates. You can also
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28 March 2014