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Written by rosalind renshaw

Shelter has called for a huge expansion of shared ownership homes, to help both first-time buyers and people stuck in homes that have become too small for them.

It wants to see shared ownership homes become a norm, and routinely traded via high street estate agents.
 
In a new report, the housing charity says families typically earning between £20,000 and £40,000 face the prospect of years of private renting or being trapped on the first rung of the property ladder.

It says that the Help to Buy mortgage guarantee scheme, launching in January, will be of no help to most, and that the current Help to Buy shared equity scheme can only potentially help about half such households.
 
Shelter estimates that as many as 1.8 million families in England are on low to middle incomes, with almost three-quarters (73%) priced out of a family-sized home.
 
New figures from the charity found that the mortgage guarantees of Help to Buy to be rolled out in January will still leave the majority priced out, with more than three in four families (78%) on low or average incomes still unable to afford the monthly mortgage repayments on a family-sized home using Help to Buy – even if they had a deposit.

In contrast, the report finds that mortgage repayments on a shared ownership home would be affordable for 95% of families on low or middle incomes.

Currently, just 174,000 households (0.8%) in England live in shared ownership homes, which are usually managed by housing associations which collect rent on the remaining share. The average share that people buy at the moment is 35%. All shared ownership homes have to be marketed first to a defined list of applicants before they can be sold on the open market.

Shelter says an investment of £12bn could build 600,000 new shared ownership homes – enough to give almost half of England’s private renting families the chance to own their own home, and a huge boost to house building.
 
Kay Boycott, director of campaigns and policy at Shelter, said: “We need to see a new generation of shared ownership for the ordinary families locked out of social housing and priced out of home ownership. The reality is that soaring house prices mean that the traditional market is no longer working for ordinary people.
 
“Building the new shared ownership homes we desperately need is the only way to give thousands of families a stake in the stable home they want at a price they can afford.
 
“A national shared ownership programme is the bold and radical solution we need.”
 
Under Shelter’s new proposals, buyers and sellers would be able to trade shared ownership homes in the normal way through estate agents, and deal with high street lenders.

* Tomorrow, Legal & General Mortgage Club is launching a two-year fixed-rate shared ownership mortgage with Leeds Building Society. The mortgage is available at a rate of 4.79% with a 90% maximum borrower share.  

Phil Coombes at Leeds Building Society said: “We are all well aware of the difficulties facing first-time buyers. This shared ownership product facilitates that first step, and provides a starting point to staircase up to full home ownership as earning potential increases. There is no doubt that it will prove attractive to those customers who are ready to make the initial move on to the property ladder.”

Comments

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    No! I had a shared ownership home as my first rung up. It was overpriced to start with (negative equity for over 10 years) and the rent ended up being more than the mortgage, and the two combined more than an ordinary mortgage would have been. If the government wants to help, they should stop so many coming to these shores pushing up the need for housing, stop the proliferation of holiday and second homes by some sort of parish licencing system, offer more shared-equity schemes on all types of property (where no rent is paid but the % government share is paid back upon eventual sale), and I think most importantly somehow peg prices to the actual cost of the building works + cost of land and not the hyper-inflated prices caused by capitalistic opportunism and the ridiculous concept of 'market price' which actually means 'the highest amount that can be squeezed out of those needing a roof over their head'. A queue for an item does not make it suddenly intrinsically worth more, or retroactively more expensive to produce.

    • 30 August 2013 16:46 PM
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