Shared Ownership Schemes giving hope to First Time Buyers
As first time buyers are hit once again by the prospect of yet another hurdle to getting onto the property ladder as mortgage rates continue to go up, the Government has hit back with new plans. Shared Ownership mortgage schemes have been announced to help first time buyers to get into the property ladder and finally get a hand at doing it.
PR9.NET June 10, 2008 - England, UK - First Time Buyer have been, for the past couple of years, been almost completely priced out of the property market, but with the introduction of the shared ownership scheme First Time Buyers are finally getting the chance to secure a foothold on the property ladder.
The government has announced that first time buyers earning under £60,000 will now be eligible and able to apply for the low cost shared ownership scheme, 'Open Market Homebuy'.
The two new Open Market HomeBuy Shared Ownership schemes that have been announced allow first time buyers to buy as little as half of the property and pay a low interest loan on the remainder. The government claims that a household with an annual income of £32,000 should be able to afford a house of £200,000 with the shared ownership scheme and pay £760 a month. Without the HomeBuy scheme, buyers would be expected to pay £1,350 per month, which for many is out of any household budget.
Up until recently, the shared ownership scheme was only open to those in key worker positions, such as teachers and other priority buyers, but now the government has opened this up to first time buyers.
House prices may be falling, but mortgage rates have been climbing and the necessity to have a decent and sizable deposit has become imperative, pricing most first time buyers out of the market.
With the past few months a crazy time for anyone looking to buy or sell, could shared ownership be the answer? The government are promoting shared ownership mortgage schemes, where the first time buyer can buy 25% to 75% of a property and then rent the remaining share from their local housing association. Because the scheme is government funded, the rent has to be 'affordable' and therefore all of your circumstances and outgoings are taken into account, again making the scheme more accessible. As time goes on you can also 'staircase', which is the term used to describe the ability to buy more in the property.
The government has plans to spend a sizable £200m on brand new housing and some of this will be sold through the First Time Buyers New Build HomeBuy scheme.
Shared Ownership Schemes are finally making getting on to the property ladder a possibility for first time buyers, but the process is worth understanding. Research the facts and figures involved and speak to a mortgage advisor who can work out which product is right for you.
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