Getting a leg up on the housing ladder

The high cost of renting combined with the increased reserve of lenders has meant that many millennials have a tough time getting on the property ladder. However, the Government is well aware of the issues and the tide is turning, with initiatives and incentives aimed at supporting first time buyers. Debbie Clark looks at the options

Often, the biggest barrier is saving a large

enough deposit. However, the initial layout may be less than you expect and, with the average cost of a mortgage significantly less than rental costs for most, it is definitely worth exploring all of the opportunities available to you.

Here we look at a handful of popular options. Remember to look out for any incentives on offer from developers too, as they can make all the difference to affordability, particularly in the early days of homeownership.

SHARED OWNERSHIP

Shared ownership is a Governmentsupported way to buy an apartment or a house. You buy as much as you can afford and pay rent on the remainder. Over time, if you choose to, you can buy the rest and own the property outright.

New build homes for shared ownership sale are available in most parts of England. Existing homes in more established communities are also on offer through housing associations’ resales programmes.

Shared ownership is designed for people who cannot afford to buy a home that suits their household’s needs on the open market, mainly first time buyers. To be eligible, your gross household income should not be higher than £80,000 per annum (£90,000 in London).

One of the biggest benefits of shared ownership is its much lower mortgage deposit requirements; these are calculated as a percentage of the share that you buy rather than on the full property value, making access to homeownership truly affordable for many.

Rents for shared ownership properties are calculated at 2.75% (sometimes less) of the share owned by the housing provider. They are not market rents. They rise each year by RPI (Retail Price Index) plus 0.5%. Shared ownership is changing and some new features were introduced in April 2021 and will be rolling out over coming months. For example, the minimum share available to buy is reducing from 25% down to 10% of the property value.

A contribution by the housing provider of up to £500 per year towards certain repairs in the property’s first 10 years is another of its new features.

One other is the option to buy more shares (this is called staircasing) adding an extra 1% each year to the portion that you own for a period up to 15 years.

These new product features are all subject to conditions, and you will need to check with the housing provider to understand which ones apply.

Shared ownership is a leasehold product; if you buy an apartment and, over time, you increase your share to 100%, then the

BUYING OFF-PLAN

The idea of buying a home off-plan may seem a little daunting, but buying a home while it’s still under construction can actually have big benefits.

Perhaps, most importantly, by getting in there first, you have your pick of the plots. You want the balcony that overlooks the park? The south-facing garden? The corner plot? It’s yours. No compromise. No meeting the neighbours when you move in and secretly wishing you’d bagged their place first!

The same goes for the interior. Developers are usually very open to buyers personalising the specification if you get in there early enough. Depending at what stage of the build you purchase, you may be able to customise details such as wall tiling, flooring and style and colour of kitchen doors and worktops.

Buying off-plan also crucially buys you time. Many first time buyers report that this has been a real blessing; as the initial savings they had are used to purchase the property, the additional time gives them the opportunity to save for all the extras that make that first property "home".

Sheetal Smith, Sales and Marketing Director at Pennyfarthing Homes, said, “With demand for housing at an all-time high, buying a home off-plan is the best way to beat the competition. Our dedicated team are on-hand to provide buyers with help and guidance every step of the way, so they can feel assured their home is being crafted to the exceptionally high standard seen across all of our developments.”

Most developments will have a show home and detailed artist’s impressions or models of the development as a whole, so you can get a feel for the finished product. You also get the added excitement of watching your dreams literally come to fruition!

apartment remains leasehold. If you buy a house and you staircase to 100%, then you will own the freehold of the house.

HELP TO BUY: EQUITY LOAN

With Help to Buy, the Government provides equity loans to first time buyers enabling them to buy a new build property from a private developer. Outside of London, the loans equate to up to 20% of the property value; in London they are provided up to 40% of the value.

The price of the property you can buy with a Help to Buy: Equity Loan is capped, with prices varying by region. In London, for example, the maximum property price is £600,000. In the North East, the maximum is £186,100. Mortgage deposits for Help to Buy: Equity Loan purchases are based on the full property value.

Help to Buy: Equity Loans are interest free for the first five years, after which you will be charged an interest rate that starts at 1.75% of the loan amount, rising in April each year by CPI (Consumer Price Index) plus 2%.

You can pay back all or part of the equity loan at any time. Repayments are calculated on the market value of the property at the time you pay off any of the loan.

The loan must be paid off in full by the time you reach the end of the loan’s term (usually 25 years) or you pay off your repayment mortgage, or at the time you sell the property.

5% DEPOSIT MORTGAGES

Mortgages at 95% loan-to-value have made an impressive comeback, thanks in part to the Government offering to underwrite these mortgages for lenders in a new guarantee scheme. Many national lenders are now supporting the scheme, with more deals available all the time. This enables buyers to obtain access to 95% mortgages, meaning they need only save a 5% deposit.

To be eligible, the property must be valued at no more than £600,000 and lenders are not lending on new builds. The scheme will run until December 2022.

GUARANTOR MORTGAGE

Typically aimed at first time buyers, a guarantor mortgage is a home loan where a parent or a family member offers their savings as security against the loan, agreeing to cover the costs of the mortgage payments if you miss them.

Guarantors are required to have savings, or a property, and a good credit score. They must also seek legal advice so they are aware of the financial risk they are taking. These mortgages are generally most suited to homebuyers who have a low income, a small deposit, a bad credit score and little or no credit history.

BUY WITH FRIENDS OR FAMILY

If you are able to pool resources with a friend or family member, you could be closer to homeownership than you think. Living costs would be reduced by sharing the load and you would still benefit from any increase in house prices.

If joint funds allow you to put down a 10% deposit, as opposed to a 5% deposit, you could even benefit from more competitive mortgage rates. Of course, you will need to be certain that you are happy to cohabit and have an agreement in place for what happens if and when your circumstances change in the future.

CASE STUDY

Will Towson, an IT technician, and Georgina Harrison, a nursery nurse, have moved into a two bedroom property at David Wilson Homes’ Fleckney Fields development.

With a wedding planned for August, the couple, both 25, are delighted to have been able to move into their new home ahead of their upcoming nuptials.

The couple each saved through a Help to Buy: ISA. Will said, “We were both living with our parents before, so we fortunately didn’t have many outgoings and saved up quite comfortably.” The couple hoped to buy a two bedroom property which would allow them the space they need and provide flexibility for the future.

They were also keen to buy a new build. Will explains, “A first home is a big investment and we knew it would be good value for money. We didn’t like the idea of having to renovate a secondhand property and there’s the added assurance of having someone onsite should we need them for anything.”

The couple purchased a Wilford-style home featuring a stylish fitted kitchen, a generous lounge and dining area, in addition to a downstairs cloakroom. Upstairs, there are two double bedrooms, a family bathroom and a storage area.

Will and Georgina are from Market Harborough and Loughborough, but weren’t aware of what Fleckney had to offer before beginning their search for a property. Will says, “We didn’t know much about the area but the village is great for starter homes. There are shops, takeaways and nice walks through the fields on our doorstep so we’ve got all we need. The location of our home at Fleckney Fields is quite comforting as we’re surrounded by like-minded people. Our neighbours are also first time buyers and only a year younger than ourselves, which is nice.”

Rachael Harrison, Sales Director at David Wilson Homes East Midlands, said, “We are delighted to hear Will and Georgina have settled in well at Fleckney Fields and we wish them the very best for their wedding and married life. Our growing community in Fleckney is a wonderful option for first time buyers and growing families alike with a quintessential village location on offer."

CASE STUDY

The chance to own a larger home for a fraction of the price was too good an opportunity to miss for fi rst time buyers Hannah and Richard. The couple combined careful saving strategies with the Help to Buy scheme to secure a superb three bedroom property at Bellway’s Helios Park in Hawley, Hampshire – allowing them to take their fi rst steps on to the property ladder.

Hannah, who is 26 and works in military communications, and her partner Richard, 30, a scheduler for a diamond manufacturing company, previously lived with their respective parents in Ascot and decided to take the plunge and purchase their fi rst home together with the aid of the Help to Buy scheme.

Hannah comments, “We wanted to get on the property ladder as soon as possible and didn’t want to rent; so we saved for three years – cutting back on luxuries such as holidays, going out for dinners and unnecessary purchases. We used the Help to Buy scheme; which allowed us to look at a bigger property. “We wanted a new build so that we could use Help to Buy and also so that we didn’t have to be involved in a chain. We visited two other new developments before we came here. Help to Buy went really smoothly and required very little effort at our end. We had a little over a 5% deposit which took some of the weight off the mortgage.”

The couple chose Helios Park due to its idyllic location: “It’s halfway between where we both work so we have a great commute. We’re also still close to our parents and friends, which was important to us because we didn’t want to move to an area where we didn’t know anyone. We didn’t want to lose our old life. It’s perfect for our dogs, Todd and Shevy too. There’s some really lovely woods lining the estate which is great for walking them. It just made perfect sense to move here.

“We’d viewed a two bedroom townhouse at Helios Park before we found this property, but opted for the three bed on the basis that it has a much more social layout with the open plan kitchen/living area. We liked the idea of having someone cooking and still being able to chat and communicate with those in the living room. It also came with an extra bedroom which we’ve subsequently turned into a study; this is where Richard works. I work in the second bedroom, and the master bedroom is a work-free zone. This is a perfect set up for us given the current climate.”

OUR PICK OF HOMES ON THE MARKET

VERWOOD, DORSET

Potters Wood

FROM £180,000

Just minutes from the centre of Verwood, Potters Wood is a new, sought-after development in an idyllic countryside location, offering delightful surroundings to walk, cycle or relax. Encompassing one and two bedroom apartments, and two, three and four bedroom semi-detached and detached houses, there really is something for everyone. Homes are currently available to purchase off-plan.

pennyfarthinghomes.co.uk/site/potters-wood 01202 403 144

HACKNEY WICK

Fish Island Village

FROM £445,000

This award-winning development by housebuilder Hill and London housing association Peabody, has become a striking addition to this vibrant waterside neighbourhood. Fish Island Village occupies a well-connected Zone 2 location, with great transport links and green spaces moments from the development. Designed with community in mind, this unique canalside scheme comprises an eclectic mix of modern apartments surrounded by landscaped communal spaces where residents can access designated workspaces, a state-of-the-art gym and a concierge service. The development is just 10 minutes’ walk to Hackney Wick station and 15 minutes to the hub of Stratford.

fi shislandvillage.co.uk 020 3906 1950

ASHFORD

Chilmington Green

FROM £394,995

Barratt Homes at Chilmington forms part of Ashford’s fi rst "Garden City", which will see a new development of up to 5,750 houses delivered by a number of developers, alongside a countryside park, secondary school, four primary schools, a supermarket, a new high street and a market square. Due to its close proximity to Ashford International station, the area is already appealing to Londoners, offering a rural setting with fast connections into the capital. At Chilmington Green, the new homes are surrounded by acres of green open spaces and parkland, and have been carefully designed around protected woodlands. A number of the new homes available benefi t from both a private rear garden and a fi rst fl oor balcony. A new phase of homes has just been released. Help to Buy is available on selected homes

barratthomes.co.uk 0333 355 8502

ROYAL ALBERT WHARF, E16

Gallions Place

FROM £360,000

Vistry Ventures has just launched Galyon Point, the fi rst phase of the impressive new Gallions Place development in the Gallions Quarter; a new mixed-use community of homes, shops and restaurants and play areas. The eight-storey development is brick-clad, with terraces to some apartments, along with oakstyle, fl oor-to-ceiling windows letting in natural light. There is a selection of one, two and three bedroom homes available, each including fully integrated energy-saving A-rated appliances and boasting highquality fi nishes. Located in Zone 3, Galyon Point is moments from Gallions Reach DLR station, which has superb links into Canary Wharf and beyond; ideal for young professionals looking to invest in the Royal Docks. There is also a 12-hour concierge service, bicycle storage and car parking available in a separate negotiation.

gallionsplace.co.uk 020 3993 7930

BIRMINGHAM

Manor House at Bournville Park

FROM £195,000

This iconic development is a replica of the former home of the founder of Cadbury’s which stood on the site. While in keeping with its original design, the one, two and three bedroom apartments are well suited to busy, modern lifestyles. Traditional high ceilings and large windows give way to light and airy interiors, with spacious open-plan living spaces perfect for young professionals and growing families. Many of the apartments at Manor House look out on to the surrounding green space, providing a peaceful and tranquil setting. With central Birmingham just a 20-minute drive, or 25-minute bus journey, away, residents are well connected to the city. The M40 is also just 15 minutes away by car. The Government-backed Help to Buy: Equity Loan scheme and Home Reach, Crest Nicholson’s part-buy, part-rent scheme, are available on selected properties.

crestnicholson.com/developments/manor-house-at-bournville-park/ 01217 560 953

BOURNEMOUTH

The Wessex

FROM £220,000

Occupying a prime setting just a fi veminute walk from Bournemouth’s iconic sandy beach and cliff top, the brand new one, two and three bedroom apartments at The Wessex enjoy a touch of coastal charm. Each apartment is fi nished to a high standard, with quality interiors, modern layouts and an impressive specifi cation. Living/dining areas have been thoughtfully planned to maximise space, with open-plan layouts leading out on to private balconies for most apartments. Residents also have access to secure underground parking, allowing room for large expanses of landscaped green spaces and lawn areas. With homes ready to move into now, buyers can get the keys to their new home in as little as four weeks.

inlandhomes.co.uk/developments/west-cliff-road 01202 096 864

CASE STUDY

"Building a Better Harrow", the £2.2m regeneration strategy from Harrow Council, promises 5,500 new and affordable homes, 3,000 new jobs, two additional schools, new public squares and green spaces, and a vast array of improved local amenities.

First time buyer Nicholas Willison, a 33-year-old Revenue Director in the hotel industry, was one of the early purchasers at Barratt London’s Eastman Village; one of the largest residential developments in the area. He says, “After renting for many years in Putney, I knew I really wanted to get on the ladder. I did my research and attended a few Help to Buy events, narrowing down a handful of areas in London within my budget. Harrow was one of them, and by far the best for me. I liked the fast transport links, leafy residential atmosphere, and knew that with lots of redevelopment going on in the area, it would be somewhere that would just get better over the years.”

Eastman Village stood out for Nicholas when he started to research new homes further. He was particularly impressed by the facilities, including an on-site gym and a large private balcony with each apartment. Nicholas took advantage of the Help to Buy scheme to purchase a spacious one bedroom, fi rst fl oor fl at at a guide price of £309,000. “The deposit was part gifted to me from my parents and a lot of my own savings,” explains Nicholas. “I put aside things like annual bonuses and had a set target to save from my salary each month.” His strict saving paid off and his mortgage payments are around half of what he had been paying in rent in Putney.

Nicholas admits that Harrow wouldn’t have been his fi rst choice of locations in London, but he knew he needed to be realistic, “Looking further afi eld and using the Help to Buy scheme was the difference between owning my own place and potentially not getting on the ladder at all.” However, living north of the river for the fi rst time, Nicholas has been pleasantly surprised and he confi rms that he is there to stay! “The diverse community feel within the development is a huge, unexpected advantage. There are families here, professional singles like me, and younger couples. Having a friendly community is so important, and the lockdown has just highlighted that for me.”

CASE STUDY

First time buyers Royston and Stephanie Rodrigues, both aged 32, are delighted with their new apartment at Barratt London’s Hayes Village development. Though getting there hasn’t been easy, it has defi nitely been worth it.

Royston, who works as a freight rate calculator in the tanker industry, and Stephanie, a senior physiotherapist with the NHS, saved a sizeable deposit of £21,000 over three years. Royston says, “We had to make a few lifestyle modifi cations, and we lived with Stephanie’s parents for two years while we saved for our deposit using a stocks and shares ISA.”

The couple stumbled across Hayes Village, on the site of the former Nestlé factory, last August. With a mix of original, converted art deco buildings and new apartment blocks tailored to fi t in with the history of the site, the development will eventually provide 1,386 one to three bedroom apartments, set in more than nine acres of parks and green open space, all just a short stroll from Hayes & Harlington station which is soon to be served by Crossrail.

The couple were looking for a two bedroom, two bathroom apartment so, even with their sizeable deposit, they needed a high loan-tovalue mortgage. Royston explains, “We had seen a mortgage adviser and were aware of what we could afford, but with the pandemic, 95% loan-to-value mortgages had almost come to a halt. Thankfully, the Government’s Help to Buy: Equity Loan was a great tool and that ‘topped up’ our deposit and reduced the loan-to-value of our mortgage.” As a result, the couple were able to buy their home fi rst home off-plan for £431,000, including parking.

Although buying off-plan made the couple a little nervous, having seen the show apartment and the model of the development they were able to envision what they were buying. They found the sales staff patient and supportive, answering all of their questions.

The current phase at Hayes Village includes spacious apartments inside the classic art deco factory building itself, which was built in 1919 as one of a series of "daylight factories" by British architect Wallis Gilbert. Its huge, multi-paned metal windows and generous ceiling heights have enabled it to be converted into stunning, light-fi lled apartments.

PADDINGTON

North Wharf Road

FROM £187,500*

Octavia is offering one exclusive one bedroom apartment for shared ownership, placing a brand new home in prime Zone 1 Paddington within fi nancial reach for an eligible fi rst time buyer who lives or works in Westminster. North Wharf Road is in walking distance to Paddington Basin, the terminus of the Paddington arm of the Grand Union Canal. The area has seen signifi cant regeneration during the past decade and is now home to a mix of smart new apartments and offi ce buildings; the Paddington Basin has become something of a go-to destination, with a selection of waterside restaurants, bars, pop-up food fairs and events on offer.

sharetobuy.com/developments/2486 020 8354 5500

*Based on a 25% share of the full market value of £750,000

ALPERTON

Vista Apartments

FROM £78,750*

These one and two bedroom shared ownership apartments are located just a fi ve-minute walk from Alperton tube station and are ready to move in to. The Vista Apartments incorporate a fully fi tted contemporary kitchen with white goods, high-specifi cation fl ooring throughout and a modern bathroom featuring good-quality white suite and tiling. There is exciting regeneration well under way in Alperton, and with excellent local amenities the area offers all the convenience and connectivity of city living while providing the comfort of a suburban lifestyle.

sharetobuy.com/developments/2068 020 8354 5500

*Based on a 25% share of the full market value of £315,000

CHARLTON

Lime Works

FROM £120,750*

A selection of well-designed and highly specifi ed one, two and three bedroom apartments are available to view at Victoria Way, Charlton. All homes will benefi t from private outdoor space as well as pleasant communal grounds with landscaping and play areas. The development is situated between Greenwich Peninsula and Woolwich Arsenal, with quick access to local transport and a large retail park. Charlton station (Zone 3) is just an eight-minute walk, offering frequent trains into central London, with Woolwich Road just a few minutes’ walk for buses to North Greenwich, Lewisham and Peckham. Limited allocated parking is available to buyers, and one car club membership per household will be included for fi ve years.

optivosales.co.uk/lime-works 0800 0121 442

BOW, EAST LONDON

The Forum

FROM £92,500*

The Forum is an exclusive collection of 14 contemporary one and two bedroom apartments, located adjacent to the famous Roman Road in east London. The apartments are all designed for a relaxed modern lifestyle. Each home benefi ts from open-plan living, with lots of natural light from the expansive double-glazed windows, complemented by a modern specifi cation including wood-effect fl ooring and fully integrated appliances as standard. There is also plenty of outside space as apartments benefi t from spacious, landscaped courtyards and grounds, and some have their own private balcony or terrace. Bow Road, Bow Church and Mile End stations are all less than 1.5 miles away from The Forum and offer a choice of three tube lines and the DLR.

newhomes.gatewayhousing.org.uk 020 8057 3232

*Based on a 25% share of the full market value of £370,000

TUNBRIDGE WELLS

1887 The Pantiles

FROM £275,000

1887 The Pantiles by Dandara offers a collection of one, two and three bedroom luxury apartments with concierge service, and contemporary two bedroom mews homes, located in the heart of Tunbridge Wells, Kent. Properties have been designed to maximise space and light, while all homes have access to communal courtyard gardens and some apartments benefi t from private balconies. High-quality internal features include fully fi tted German kitchens with integrated appliances and two-way video access controlled from within the apartment. Ideal for commuters, Tunbridge Wells station is just a fi ve-minute walk away and offers frequent services to London in less than an hour and easy journeys across Kent and Sussex. Help to Buy is available on selected homes.

dandara.com 01892 726 112

DRAYTON, HAMPSHIRE

Novo

FROM £285,000

Novo by Dandara is a new development of two, three and four bedroom family homes with private gardens, garages and/or allocated parking. Novo is located in a peaceful residential area, with great transport links to the A3 and M27. Cosham station is nearby, with regular rail services to Havant and Portsmouth, as well as direct rail links available to Southampton, London Victoria and Waterloo stations. The quality of schools is also a major draw for families looking to buy in the area. Help to Buy is available on selected homes.

dandara.com 02394 275 869

HARROW

Eastman Village

FROM £82,750*

Hyde New Homes’ new phase of Eastman Village, on the site of the former Kodak factory in Harrow, offers a selection of one, two and three bedroom apartments. Each boasts a high specifi cation including contemporary kitchen units with integrated appliances, quality fl ooring, underfl oor heating, private outdoor space, parking to selected homes and super-fast Hyperoptic broadband. Residents will enjoy a gym, currently in the planning stages, as well as cafes, restaurants and a supermarket. Families will benefi t from the excellent array of schools. The development is 10 minutes' walk from Harrow & Wealdstone station with Bakerloo Line services to London Paddington in less than half an hour, as well as the Overground. Harrow-on-the-Hill station, a bus ride away, connects to the Metropolitan Line and National Rail.

hydenewhomes.co.uk 0345 606 1221