A helping hand for first-time buyers in Hampshire this Thursday

Talk to any prospective first-time buyer and it would seem that home ownership remains an impossible dream. Recent reports have shown that the average cost of renting a home in the UK has risen to an all time high of £713 a month, making saving for a deposit all but impossible. And even for those who can save, mortgage lenders are still requiring much higher levels of savings than most people will ever lay their hands on. The "bank of Mum and Dad" can help some, but not all.

The National Housing Federation published a report last month warning that levels of home ownership would fall considerably in the coming years, to levels not seen since the 1980s, and that an entire generation may be effectively locked out of the housing market.

So should you be resigned to never buying a home of your own, or are there ways that you can meet that aspiration? And Mums and Dads, how can you help to move your grown up children on so that you can have your house back!

There is actually a range of Government-funded affordable housing schemes designed specifically to help first time buyers get that important step on the housing ladder that may seem out of reach. Schemes such as Shared Ownership and the newly launched FirstBuy mean that many aspiring purchasers are rediscovering their ambition to own their own home.

Primarily aimed at first-time buyers, to be eligible for the HomeBuy schemes you need to have a household income of less than £60,000 and not be able to afford to buy outright yourself. The schemes are not restricted to ‘key workers', as many mistakenly believe.

The Government appoint a dedicated organisation to manage the application process and marketing for these schemes, known as a HomeBuy Agent. In Hampshire, this role is undertaken by local Housing Association Radian, under the branding HomesinHants, and finding out about your housing options couldn't be more simple.

On applying to HomesinHants, your eligibility is checked, and you then have access to all of the schemes and properties applicable to you. In September there were over 600 properties available across the county, with new homes being added every week.

Shared Ownership is the most widely available of the HomeBuy schemes, offered via housing associations. Often recognised as ‘part-buy/part-rent', Shared Ownership gives you the chance to get your foot on the property ladder by buying a share in a brand new home. With shares available from 25% to 75% of market value, and a low-cost rent paid on the remaining unsold share, this means you could buy a share in your first home for as little as £26,000. Applicants are asked to maximise what they can afford to buy, and in most cases have the option to buy further shares at a later date, called ‘staircasing', until they eventually own 100% of the home. Second- or third-hand homes may also be available, known as Shared Ownership Resales.

Andrej Nesvadba and Bibiana Brettschneiderova, purchased their brand new two-bedroom apartment with Shared Ownership, offered by local Housing Association Radian.
"We were saving as much as we could each month towards a deposit, but it was hard to get a large sum together to buy on the open market," explains Bibiana. "Once we were registered, we were sent information in the post from Radian about a brand new development coming up in Southampton called Fullerton Place, not far from where we were already renting. It seemed ideal, so we went along to their open day to view the show apartments they had."
The young couple purchased a 40% share for £66,000 in a two-bedroom apartment on the third floor, with a private terraced balcony, large open plan kitchen/living space and two double bedrooms.

Mortgage lenders offering products for Shared Ownership currently require a minimum deposit of just five to ten per cent, based on the value of the share purchased, so Andrej and Bibiana were able to buy their own home with a deposit of just £3,300; considerably cheaper than if they had purchased on the open market.

"Our monthly payments are the same as we were paying on the one-bed flat we used to rent!" adds Andrej. "This was an excellent way for us to get a foot on the property ladder, and it's a bonus to have such a lovely, brand new apartment too."

After the Government's March 2011 Budget Announcements of additional funding to assist first-time buyers into the property market, the newest HomeBuy scheme, FirstBuy, was launched in August. A total of £180 million has been allocated by the Government to provide nearly 10,500 new homes for sale with the help of an equity loan across England over the next two years.

Available on selected new-build developments in Hampshire and around the country, buyers can receive a loan of up to 20% of the value of the home they buy, which acts as a deposit. This means that buyers need only find a deposit of around five per cent, and with a mortgage of 75%, some excellent rates are available from lenders. No interest is charged on the equity loan for the first five years of ownership, with a charge of 1.75% applicable from year 6, with subsequent rises linked to inflation. The loan can be repaid at any time, though must be paid back in full on sale of the property.

To find out more about how the schemes work and what homes are available, HomesinHants host regular shows across the county, with the next being held at St Mary's Stadium, home of Southampton Football Club on Thursday 20th October, 3.00pm to 7.00pm. Over twenty housing associations and developers, financial advisers and estate agents will be on hand to offer advice and information about the options available. For more details about the event, which is free to attend, or to apply to HomesinHants, call 023 8062 8004 or visit www.homesinhants.co.uk