A new report from mover conveyancing services provider, My Home Move, has found that the number of shared home ownership purchases increased by over 130% in the last six years.
The Government shared ownership scheme, which was re-launched eight years ago via HomeBuy Direct, has grown in popularity as house prices across the country have risen by nearly 30% since 2011. Having analysed over 100,000 of its home buyer records, My Home Move discovered that shared home ownership purchases account for around 1% of property transactions year each, with nearly one in five (17%) being purchased by first-time buyers.
At Joint Equity we have found that over 58% of applicants are First Time Buyers with 33% in the divorced and separated and 9% in the retired-renting sectors.
Doug Crawford of HomeBuy says: “For many, the prospect of buying a home outright is still a pipe dream, as prices have risen by around £60,000 since 2011, meaning that a home in the UK now costs an average of £217,000, or if you’re looking to buy in London, nearly £500,000. It is no wonder that solutions like shared home ownership have grown in popularity, and by the end of 2017 we would expect shared ownership transactional volumes to account for more than 1% of all activity – especially as many lenders are now more willing to lend on shared ownership schemes, which historically only a small number of building societies would.”
As there were 1,057,340 residential purchases in England last year a volume of 1% is 10,500 which Brad Bamfield, CEO of Joint Equity, noted is 25% below the target of 135,000 the Government announced in the 2015 Autumn Statement and the announcement tin the 2016 Budget that 13,000 new shared home ownership properties would be brought forward into the 2016 2017 round.
The research also revealed that, on average, the age of those buying a shared ownership home has decreased, with those in their mid-thirties now accounting for the majority of purchases; while between a third and a half of all shared ownership transactions take place in London and the South East each year.
Doug continued: “Whereas six years ago it was those in their 40s who looked to buy a shared ownership home, today it is those in their 30s – thanks in part to the Help to Buy: Shared Ownership scheme.”
Brad Bamfield also says “Joint Equity has found that our age range of applicants for partnership in the Joint Equity Shared Home Ownership Scheme is between 25 and 75 with the youngest applicant just 21. It is clear that shared home ownership and especially our Scheme with the total emphasis on Partnership in Ownership is easily understood and very acceptable to our potential Resident Partners.”
The target Joint Equity has is to add 25,000 Joint Equity Shared Home Ownership homes a year once we have established adequate private funding sources but Brad Bamfield says “our target of 25,000 homes will only scratch the surface of the demand which has built up over the last 10 years and our research shows a past demand of nearly 500,000 which is growing by around 75,000 homes a year. The difference between the Joint Equity and the Government schemes just about is we will support “any home, any where” and focus on second hand property, as we do not feel new build is of sufficient standard or size to give long term investment security to our Partners. The other major drawback to Buy to Let is that the ownership is leasehold until the Government loan is paid off then you have to buy the freehold.”
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