As the National Housing Federation forecasts that some future first-time buyers in London may have to wait until they are 52 years old before they can afford to buy a home, Notting Hill Home Ownership is urging buyers in London to look into alternative routes.
Recent figures show that many people buying properties in London through shared ownership schemes are able to get their foot on the property ladder at a much younger age, with many being in their twenties.
As an increasing number of shared ownership schemes become available across London, those that have not yet taken the property plunge due to the hefty costs involved should consider this route as a viable alternative.
Mark Vaughan, Managing Director of Home Ownership at Notting Hill said:
“It’s a difficult time for buying property in London. As well as the usual financial challenges that accompany buying a home, house hunters are also having to deal with an uncertain economic climate and mortgage lenders putting further restrictions on their products.”
However, there are some steps that would-be buyers can take to help them get closer to picking up that all important first set of keys.
6 Top Tips to First Time Buyer Heaven
1. Financial planning
Planning your budget and ensuring you have enough money saved to cover all the costs involved with buying a property is essential. Nasty financial surprises are the last thing you want when buying a home! Make sure you’ve budgeted enough for those additional costs such as legal fees and stamp duty, and don’t hesitate in contacting an Independent Financial Advisor (IFA) to discuss how much you can afford. IFA’s are often available at the launch of many properties so make sure you take advantage of any free mortgage clinics they offer as this will give you a clearer picture of whether a property is the right one for you. You can also speak to your local housing association for an insight into properties that are available in your area.
2. Get saving!
Having a good deposit in place is essential for anyone wanting to buy their first home – and the bigger the deposit you can secure, the better. However, saving for a deposit can be tricky, and for some first time buyers it may seem like an impossible task. Making small changes in your day-to-day life (like reducing the number of nights out you treat yourself to, or taking a packed lunch to work rather than buying everyday), can have a huge impact on what you’re able to save every month. Skipping your £5 morning latte and muffin on your way to work could save you £1,300 a year!
3. Move in with your parents
For those would-be buyers that are renting, it might be cost-effective to consider a house-share or moving back in with parents for a while. Not only will you save on your monthly outgoings by cutting down on rent, but it might also give you that extra bit of motivation to get out there and get your foot firmly on that ladder!
4. Buy with friends
For some, buying their first home on their own is simply too much of a financial mountain to climb. However, that doesn’t mean it can’t be done. Buying – whether on the open market or through shared ownership - with friends will not only ease the financial burden, but will often mean your borrowing potential is instantly boosted.
5. Shared ownership
Designed to help buyers make their first property purchase, the New Build HomeBuy scheme enables people to buy a share of the property that they can afford, usually between 25% and 75%, and they then pay below market rent on the rest. This means that you can often pay a deposit of as little as £10,000 compared to the national average first time deposit of £34,000.
Buying a property through shared ownership often enables you to buy a bigger property than you thought you could manage to pay for, and in great neighbourhoods that you might not have been able to afford otherwise. The financial benefits will also continue once you’ve moved in, as monthly mortgage and rent outgoings are often less than paying rent on a similar property.
You also have the option to increase the number of shares you own as and when you can afford to do so. This process is known as ‘staircasing’ and means that you can eventually own your property outright.
6. Location, location, location
Location is often considered to be one of the most influential factors when choosing your home. However, while it is important, it can also have a massive impact on price, so buyers should make sure they consider neighbouring areas. For example, while Wimbledon demands the highest of property prices, nearby Raynes Park will have just as much to offer, for much less of an asking price!
Having lived in a shared house for over three years, and with his girlfriend due to move back to London after living in Paris, Andrew Reeves decided it was time for them to get a place of their own and get on the property ladder.
However, even with a good job in advertising and a salary of £29,000, Andrew was unable to get enough money together to buy a property outright. Andrew knew that he wanted to stay in the Stockwell area, and having heard about the New Build HomeBuy scheme in the press, he got in touch with Notting Hill Home Ownership to see what his home-buying options were.
Just a few months later, Andrew bought a 60% share in a one bedroom apartment in Notting Hill Housing’s ‘The Quadrant’ development in Stockwell, for £130,000.
In July, Andrew and his girlfriend moved into their new home. Their fifth floor flat with private balcony has fantastic views of the area, with the couple being able to see right down to Crystal Palace.
“The New Build HomeBuy scheme is fantastic, and for me, it was the only way I could ever afford to get my foot on the London property ladder. My girlfriend and I now have a wonderful flat at a price that we can afford and we’re really enjoying finally having a place we can call home.
“I wouldn’t hesitate to recommend the scheme to anyone in my position. It’s a great way to get a nice, modern home at good value and Notting Hill Home Ownership has got some brilliant developments around the capital to choose from.”
Having lived in rented accommodation for over ten years, Claire Cohen decided the time was right to get her foot on the property ladder and move out of her rented flat in Stoke Newington.
However, unable to get a mortgage based on her salary alone, charity worker Claire decided to look into shared ownership after hearing about it from friends.
Having narrowed her search area down to North West London, Claire viewed several flats before taking a look at Notting Hill Housing’s Granville Road development in Barnet. Claire instantly fell in love with it and bought a 40% share of the property for £99,200. She moved into the one bedroom garden flat in May 2010.
“The reality is that I wouldn’t have been able to afford to live in such a beautiful home, in such a great part of London if it wasn’t for shared ownership. Not only do I get to live in wonderful surroundings with my own garden, but I now own my own property without having to pay any more than if I was renting a one bedroom flat.
“I can’t recommend the New Build HomeBuy scheme highly enough. After renting for so long it’s wonderful to have my own flat, and to be able to enjoy the freedom and stability that comes with it.”
Paul Marsden, a technician at a Secondary school in Tooting, had been living with his parents since graduating from university eight years ago. Now 30 years old, and faced with three hours of commuting every day, Paul decided it was time to move closer to work and get his foot on the property ladder.
However, on a salary of £22,500, Paul wasn’t quite able to finance a home in the location he wanted, so started looking into alternative routes. Having seen an advert for New Build HomeBuy on his commute from work, Paul got in touch with Notting Hill Home Ownership and began looking for a property in November 2009.
Just a couple of months later, Paul bought a 40% share in a one bedroom apartment in Notting Hill Housing’s ‘New South Quarter’ development in Croydon, for just £58,800.
At the end of January 2010, Paul moved into his new home. The second floor flat has a private fenced terrace, as well as views of the development’s communal courtyard.
“I’m absolutely delighted with my new home. Not only have I cut my daily commute in half, but I now have my foot firmly on the property ladder. I have a level of independence and freedom that I never had when living with my parents, and I think it’s fair to say that I would never have been able to make this move without Notting Hill Home Ownership’s help. The New Build HomeBuy scheme is an absolute God-send to anyone who wants to get into the property market, but can’t necessarily secure the required finances to buy a property outright.”
Notes to editors:
Average age of first time buyers sourced from Metropolitan Home Ownership http://www.mho.co.uk/
For more information on New Build HomeBuy, or to discuss eligibility requirements, potential buyers should contact Notting Hill Housing on 0208 357 4444, or email email@example.com.
Notting Hill Housing Group is a progressive organisation providing a range of homes and services for people across the housing spectrum.
• Has been delivering vibrant urban regeneration and new developments in London since 1963
• Owns and manages over 26,000 properties in London and the South east
• Has helped over 5,500 people get their foot on the property ladder
• Runs award-winning employment programmes to get people in to work
• Works inspirationally with young people so they can fulfil their potential
• The Group includes: Notting Hill Housing Trust, Notting Hill Home Ownership, Notting Hill Commercial Properties and Notting Hill Developments.
• For more information go to www.nottinghillhousing.org.uk
For more information on the Notting Hill Housing Group, please contact Octopus Communications on 01753 827296 or email firstname.lastname@example.org
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