London is a city full of opportunity, life and diversity, yet out of the 8.5 million people living in London, 73% of low-to-middle income families – which is nearly a quarter of the population – cannot afford to pay the usual 90% monthly mortgage cost on a regular house. The Shared Ownership scheme means that 95% of the population would be able to afford and live in a stable home. So why are there less than 1% of the population that live in a shared ownership household?
In 2009 the scheme was put under the banner of HomeBuy, which is when the HCA devoted £300 million to this, and in 2018 – 2020 the UK government intend to donate £4 billion to building 135,000 more houses through shared ownership, which means so many new homes for families that cannot afford the usual ones in Marine Wharf. The scheme’s concept is a purchaser will buy 25% – 75% of the house, and rent the remaining from the housing association. Although they haven’t paid full price for the house they will still have control over it, and additional shares can be bought from the landlord at any point so the buyer can then make their way up to having full ownership of the house.
The average price for a flat in London is just under £500,000, and a semi-detached or terraced property being over £100,000 more. This is double the asking price of any other city in the UK for property. How is a first-time buyer or any low-to-medium income family supposed to afford that? If they were born and grew up in London are they supposed to leave the city when they choose to move out because the house prices are too steep? Many young people dream of moving out and owning their property, but instead now they are either still living with their parents or are fretting over whether they’ll have enough to pay their monthly dues.
There are many advantages to the home ownership scheme, such as the house can be sold at any time, it is accessible to lower-income households, it is potentially cheaper than renting, additional shares can be bought from the landlord, and it available for a vast range of developments and property types.
There are currently restrictions on who can apply for a house through shared ownership. Some of these include:
You are unable to afford a home suitable for your family size that is on the open market
You do not currently own a home
You are a newly-formed household
You are relocating for work purposes
The home you purchase must be the only home you own and/or live in.
Nevertheless, these limits are being removed after April 2016 and only military personnel are a priority. This also means that anyone with a household income lower than £90,000, or £80,000 everywhere else in England, cannot apply for a house through this scheme.
Many young people think the dream of owning their own property is out of reach and unobtainable, but through this scheme they can continue living in London and be able to afford a home of their own.