A helping hand to lift you on to the property ladder

GETTING on the property ladder is notoriously difficult in London. But if you’re one of the thousands of young professionals earning a decent salary – but still not able to fork out the post-credit crunch minimum deposit of 20 per cent in order to attain a mortgage- then you may have more options than you think.

Say “subsidised housing” and most people think of dreary council houses or unemployed people scrabbling for a roof. But although there was a time when the housing schemes provided by associations were for key workers and those very close to the bread line, things have changed considerably – now, any household earning up to £60,000 per year is eligible, and London mayor Boris Johnson has suggested bumping that up to £72,000 to reflect the inflated prices of London property. David Orchin, sales director of Asset Trust, a privately-funded affordable housing provider, says: “Because of the credit crunch, traditional home-buying has changed for good. With the deposits now needed to get a mortgage, there’s got to be an interim measure between owning and renting, and that is the world of shared ownership and shared equity.”

Broadly, there are two ways to buy a subsidised property if you are eligible: shared equity and shared ownership. Shared equity means the buyer receives a loan from the association for the deposit of the property, which enables them to attain a mortgage. Once the property is sold, the buyer must repay the loans and a proportion of any increase in equity of the property to the lender.

With shared ownership, you buy between a 25 and 75 per cent share in your home, and pay a subsidised rent on the proportion you don’t buy. You are free to buy more shares in the property when you want.

Within each of these categories, there are numerous schemes run by the country’s 1,600 housing associations. HomeBuy is the name for all Government-backed shared ownership schemes, while developers such as Barrett offer a range of schemes, in conjunction with local authorities.

A spokesman for Genesis, a housing association, says: “Since credit fell through the floor and it’s been harder to attract buyers of any type, housing associations and RSLs (registered social landlords) have realised they need to be looking at a new market – a young, aspirational section of the population.” He stresses that scheme-backed properties are spread throughout the city, including desirable areas such as Battersea and Docklands.

Linda Clark, editor of First Time Buyer Magazine, advises: “Find out the other tenures in the building. It helps to know who your neighbours are and try to ensure there are a number of other flats that are privately owned. You will probably pay quite a high service charge and you want to make sure that your neighbours care as much as you will about looking after the common areas.”

As for catches, there are surprisingly few. It’s time to get on that ladder.

Prices are from £73,750 for a 25 per cent share of a one bedroom flat, based on a full market value of £295,000. Contact Genesis Homes on 0800 883 8963 or visit www.genesishomes.org.uk

Vantage Square in Hackney has prices from £36,250 for a 25 per cent share of a one bedroom apartment. Contact Family Mosaic on 020 7089 1315 or go to www.vantagesq.co.uk

Prices start at £80,000 for a 25 per cent share in a two-bedroom property with a value of £320,000. Contact Shepherds Bush Housing Association on 020 8743 5844, www.westpointw3.com

WITH so many schemes on offer to help you afford buying a property, getting started can seem daunting. For Londoners, the first step is to register on the Housing Options website, which has been designed so that you only need to fill in one application form to access all London housing associations.

So what schemes are on offer and what can they offer you? You will struggle to get a non-new build home – a lack of money means applications for developments are top of the list.

The first is called New Build Homebuy, which is available to prospective buyers who either already live in or near London, or who aspire to live in London. It is targeted at first time buyers, although previous homeowners may be considered. Properties are sold on shared ownership terms with a minimum share of 25 per cent up to a maximum of 75 per cent. You need to get a mortgage for the share you want to buy, and to pay rent on the rest. You can also buy extra shares of the property until you own the place – known as staircasing.
Alternatively, you could try HomeBuy Direct, which offers equity loans towards the purchase of new build homes, in conjunction with housebuilders (rather than housing associations). You buy a minimum of 70 per cent of the market value of a property and the equity loan of up to 30 per cent is co-funded between the developer and government. There are no payments on the loan for the first five years, after which there is a fee of 1.75 per cent. For more subsidised homebuying options, see www.housingoptions.co.uk.

Gerben van der Est has just bought a one-bed apartment with his partner at Genesis Homes’ Docklands development P+ after living in private rented accommodation in nearby Wapping.

Gerben, who is a printer by trade, hadn’t heard of NewBuild HomeBuy until he saw a Genesis advert. He had previously assumed that he’d never be able to afford a property in London, least of all in swanky Docklands, but the shared ownership scheme seemed like the answer.

He and his girlfriend have bought a 25 per cent share in a flat and are delighted to be on the property ladder – with a shiny new apartment kitted out with high-spec appliances and offering good views.

Van der Est says: “The apartment is in a great location, Zone 2, by the Thames, and it’ll be nice to live in our very own place.” He adds: “Hopefully at some point in the future, should finances allow, we will buy extra shares in the property.”