We have been reporting in the last few weeks how many people are now struggling to get onto the property ladder due to the fact that house prices have increased whilst wages have remained mainly static. Furthermore, banks are becoming less likely to let first time buyers take out mortgages due to the fact that the economy is so unstable, meaning that many people are now choosing to rent instead. Landlords have benefited somewhat due to the increase in demand for private rented housing, however it the sector has also become more risky meaning more are depending on their landlord insurance policies.
There is another way however – many people are now choosing to invest in shared-ownership properties where they partially pay for the property and then pay rent on the remaining share. This type of property investment used to only be popular with low to middle income families a few years ago, but now there is a huge amount of people that see this as the only way of getting onto the housing market. Kush Rawal, assistant director of sales and marketing at Thames Valley Housing Association said that when they offered nine shared ownership apartments in Wimbledon there were “61 people queuing up at the door… people from a variety of professions. We have police officers buying, but likewise we have people who are doctors buying. So it’s a real spectrum of the community.”
Furthermore, the new chief executive of Motor Homes, Elizabeth Austerberry, said that without shared-ownership properties many people would never be able to get on the property ladder. She said: “We operate in London, but also across Kent and Essex and other outer areas, and there it is genuinely helping people who are on lower incomes – particularly young families and people planning to start a family relatively soon.”
However, those that are thinking of investing in shared-ownership properties have been warned that there have been some criticisms of the scheme, especially those that wanted to achieve full ownership of the property in a short amount of time. Ms Austerberry has notes that the scheme “is not designed to be something that is creating investment, as a normal right to buy would be – it’s intended for owner occupiers. Having said that, we don’t want people stuck in negative equity, and we don’t want people to be in hardship, so we would look at it on a case by case basis.”