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First-time buyers should do their homework when it comes to shared ownership

24-Sep-2009

A shared ownership scheme from the government could help first-time buyers get onto the property ladder, but they should be prepared to do some homework, it has been advised.

The programmes allow house hunters of all ages to apply, but stipulates that they must not own another property at the time of purchase.

In this way, buyers obtain between 25 and 75 per cent of a property with a mortgage. The proportion of the house that does not belong to the first-time buyer would be rented by the home owner from a housing association.

The Home and Communities Agency stated that this would represent no more than 2.5 per cent of the value of the rented portion of the property. The home owner could then progress to buy chunks of the house back from the association.

Commenting on the initatives, Jackie Lawrence, representative of Nationwide, said she expects the number of people signing up to the programme to increase.

"Buyers interested in shared ownership or shared equity schemes need to do their homework, as not all lenders support all schemes," she suggested.

People eligible for the New Build HomeBuy initiative are first-time buyers, previous home owners, key workers and housing association or council tenants.

FirstRungNow.com - how to buy a house, from finding your first flat or first house, first time buyer mortgages, shared ownership, buying with friends, gifted deposit, part buy part rent - all a first time buyer could possibly need.

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There's alot going on! What do you think?

Interest rates are low but could rise? Is this a good time to buy?

Yes
No

Varialbe rate mortgages go up if bank interest rates do. Which is your preference?

Fixed Rate
Variable rate

Interest only mortgages are cheaper but in the end you don't end up owning the property. Which is better?

Interest Only
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House prices are waivering. Do you think this is a good time to buy?

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Shared equity mortgages allow you to buy a new home with 5% deposit and an equity loan through FirstBuy. What do you think?

Too complicated
Too expensive
Too risky

Rent to buy allows you to peg a property price, save towards a deposit and pay reduced rent. What do you think?

Works best in a rising market
Too complicated
Good option