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Part-buy deposits ‘offer hope’ as prices rise

SHARED ownership's low deposits offer real hope for first-time buyers who fear they're being priced out of the property market by soaring property values.

That's the reassuring reaction from Bromford Homes to a new survey that reveals a whacking 16% increase in the average purchase price − now at £155,832 − for first-time buyers on the open market.

This big increase also bumped up the average first-time buyer deposit to £27,500 in January 2014 − up £537 from a year ago − according to the First Time Buyer Tracker from LSL Property Services.

Bromford Homes Head of Sales Alan Bradley describes the increases as depressing news for would-be homebuyers who are saving hard so that they can afford to to take their first step on the property ladder.

"We know how tough it is for first-time buyers to read these headlines and see their dreams apparently move further and further from their reach," says Alan.

"It's hard for these buyers − especially those on lower incomes − to save that all-important initial deposit even though many mortgage lenders are now prepared to offer them 95% mortgages.

"Well, the good news for them can be summed up in just two words − shared ownership. Instead of buying your first home outright, you buy a typical share of say 45% and that means your deposit can be as little as £2,700*.

"Compare that with the huge average deposit quoted by the new survey and you can understand why so many first-time buyers are saying YES to shared ownership and YES to a new Bromford home."

Beeches be quick

How does it work?

* With shared ownership, you buy between 25% and 75% of your new home − the actual amount depends on what you can afford, with around 45% being typical − and pay low rent on the remaining share. This means, for example, that you can get on the property ladder at The Beeches (pictured above) in Northfield, Birmingham, for £54,000 − that's 45% of the remaining two-bed home with a full market value of £120,000 − and a minimum 5% deposit of £2,700.

Shared ownership buyers can increase the amount they own through a process called staircasing. 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 keep in touch by following us on Twitter and Facebook.

04 March 2014