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UK expands shared home ownership scheme
The UK government is to make it easier for young couple to get in the housing ladder by expanding the right to shared ownership. Prime Minister David Cameron said that tens of thousands of young couples will be helped by reforms to existing part buy, part rent schemes. The policy should see 175,000 more aspiring home owners being able to buy a stake in their own home. Current rules that favour so called key workers such as nurses and fire fighters will be scrapped which means any households with an income of less than £80,000, or £90,000 in London, will be able to sign up to the schemes. Also, for the first time, those already in a shared ownership property will be able to move to another, allowing them to use the capital they have gained to move to a bigger property, as their families grow. ‘For years, we’ve had shared ownership, where you part buy, part rent a property. So many people are attracted to this idea, especially those who thought they’d never have a chance of owning a home,’ Cameron said. ‘But, because it’s been heavily restricted, many of those people have missed out. We’ve had local councils dictating who is eligible, based on everything from salary to profession to where the buyer comes from,’ he added. The changes will take effect from April next year and it means some people will be able to buy a house, for example in places like Yorkshire, with a deposit of just £1,400. Mark Hayward, managing director of the National Association of Estate Agents (NAEA) welcomed the news. ‘By relaxing some of the existing restrictions, a potential 175,000 aspiring homeowners will be given the opportunity to own their own home, as well as allowing existing shared ownership homeowners the opportunity to step up the ladder,’ he said. ‘However, as with all housing promises, they can’t come quick, or big enough. There is still a huge issue with supply and available land upon which to build, not to mention the physical bricks, mortar and labour to do so,’ he pointed out. ‘The house building industry is desperately short of human resource and if we are to get Britain building the number of new houses required, we need to address this problem to create actual homes and not aspirational targets,’ he added. Continue reading
North/south home repossession gap closes in England and Wales
The gap between home repossessions in the North and South of England and Wales has closed by 80% since the recession, according to new detailed research. On average, there were 1.1 repossessions per 1,000 households in the North in the first half of 2015 compared to 0.7 in the South, according to the analysis by e.surv chartered surveyors of court ordered repossessions, a difference of 0.4. By comparison, in 2008 repossession rates stood at 8.2 per 1,000 households in the North and 5.9 in the South, a difference of 2.3. This means the divide has closed by 80% across this seven year period. On a yearly basis since the first half of 2014 the North-South divide has narrowed 43%. In the first six months of 2014 there were 2.4 repossessions per 1,000 households in the North, in contrast to 1.7 in the South, with a difference of 0.7, meaning the gap closed at a faster pace over the last year than in previous years. In absolute terms, across England and Wales total home repossessions have declined by 45% year on year to reach 10,401 in the first half of 2015 from 23,279 as of the first half of 2014. As a result, the average rate of repossessions stands at 0.9 per 1,000 households, compared to a rate of 2.1 repossessions per 1,000 households in the first half of 2014. However, the report says that despite these improvements, the North is failing to match this average rate across England and Wales, with almost eight out of 10 towns in the regions seeing a higher than average repossession rate. ‘Over the last year, the North/South gap has been narrowing at an accelerated pace. Fewer people are battling unemployment and against this optimistic backdrop, finances are being bolstered across England and Wales by delayed interest rate increases,’ said Richard Sexton, director of e.surv chartered surveyors. ‘Rising wages and negative inflation are making living costs more affordable, giving people room to save. But these economic changes are also having a real impact on those feeling the strain and potentially facing repossession,’ he explained. ‘A healthier lending market is enabling people to search for cheaper mortgage options and regulatory changes, such as the 2014 Mortgage Market Review, are making a real difference in protecting borrowers from committing to potentially unaffordable mortgages in the first place,’ he added. The details of the report reveal that since the first half of 2014, Bolton has featured in the top 10 worst repossession postcodes. Despite the town seeing a reduction in its repossession rate year on year to two per 1,000 households in the first half of 2015 from 2.8 in the first half of 2014, it still has emerged as the town with the highest incidence. Within the bottom five, Oldham at 1.6 per 1,000, Liverpool also at 1.6 per 1,000 and Manchester at 1.5 per 1,000, re all in the North West and are all battling high… Continue reading
Report suggests shared ownership is misunderstood and under used
Shared ownership could help thousands more home buyers in the UK to get onto the housing ladder but research has found that this growing lending sector is under used and misunderstood. With house prices rising at a faster rate than most salaries and people continuing to struggle to get onto the property ladder, shared ownership is a potential solution for many, yet is often overlooked despite having been introduced 30 years ago. The research from the Leeds Building Society has identified a number of key myths around shared ownership including the belief that a shared ownership mortgage is more difficult to place than an ordinary mortgage. It also found that people think that shared ownership properties are in less desirable areas, that it’s more expensive than renting, that it’s difficult to qualify unless you’re on a very low wage, or a key worker and that it is like a consolation prize and not real ownership. ‘In a nutshell, the lack of understanding around shared ownership boils down to these five distinct points,’ said Louisa Sedgwick, head of intermediary distribution for Leeds Building Society. ‘In reality, these beliefs are inaccurate and there is an abundance of information for intermediaries, and the borrowers they serve, available from housing associations, the Government and lenders to help them understand how shared ownership could work for them,’ she added. She pointed out that while many housing developers or associations are linked to specific intermediaries in certain areas, there’s nothing to stop individuals approaching their own broker about shared ownership. ‘At this stage, many clients will have been assessed, certainly in terms of eligibility for shared ownership, by the relevant Housing Association before going to consult an intermediary, meaning the process for the broker can actually be fairly straightforward since they only need to place the mortgage,’ explained Sedgwick. ‘A mistaken public perception exists that shared ownership homes may be badly maintained, poor quality properties in poor, or less desirable, areas. Again, this is far from the truth. London provides an interesting example and showcases the fact many shared ownership properties offer a desirable home and community environment to live in,’ she pointed out. ‘Properties available through the scheme can be found in prestigious and sought after areas such as Notting Hill. What’s more, the availability of shared ownership properties extends far beyond London to desirable areas across the UK including Harrogate, Chester and York. ‘Shared ownership schemes are found across the UK as housebuilders are often obliged to include a proportion of affordable housing, some of which will be for shared ownership, regardless of where they are developing,’ she added. In terms of cost she explained that while many believe the monthly payments required to live in a shared ownership property hover somewhere between those paid for a full mortgage and rent, in reality, monthly payments for shared ownership properties could be lower than either full ownership or private renting. Indeed, a report published by the National Housing Federation in 2013… Continue reading
