How these first-time buyers got on the property ladder using shared ownership
Shared ownership is a part-own, part-rent initiative for households who don’t earn enough or have sufficient savings to buy outright, as long as joint or single annual income doesn’t exceed £80,000, or £90,000 in London. It enables them to buy a share in a new or resale property which is repaid via a mortgage.
The deposit is much lower than usual as it’s only required for the stake purchased, rather than the whole lot, and shared owners pay rent, usually to a housing association, on the balance.
More shares can be bought – in a process called staircasing – over time and as the percentage owned increases, rent falls.
1. ‘We secured a place of our own with a £7,000 deposit’
Frances Michael and Joshua Murray
As a rental property, an attic apartment in a converted Victorian mansion in West Hampstead couldn’t have been more perfect for Frances Michael, 26, and Joshua Murray, 30. However, they both realised that when it came to buying their own place, a new-build would be much more up their street.
‘We loved our flat and it had so much character, but there were always so many odd jobs that the landlord had to do,’ says Josh, a graphic designer. ‘Being first-time buyers, we didn’t want to worry about leaks and old piping. We wanted an easy move into a home that was newly finished.’
With home ownership on their minds for a number of years and growing frustrated with the amount they were spending on rent each month, the couple moved in with Josh’s mum to try to save for a deposit.
After discovering shared ownership, they knew the part-buy, part-rent scheme was right for them, and ended up buying a 35% share of a one-bed apartment with a large terrace at L&Q’s Churchfield Quarter in Acton, a development they first viewed late last year.
It sits on lively Acton High Street, and they were immediately drawn to the village feel of the surrounding area, as well as all the green space on site.
‘The terrace was definitely the key selling point for us – it is huge and looks onto the communal garden, which is on a podium and away from the main road, so the access we have to private outdoor space is fantastic,’ adds Josh.
‘As first time buyers in London, shared ownership is the only way we could’ve bought. We were saving such a small amount each month, so getting enough for a full deposit would’ve taken years and years,’ explains Frances, who works as a learning and development advisor.
‘The majority of apartments that were coming up were further out than we wanted to be. And after chatting to the sales team at another L&Q development we’d viewed, they helpfully suggested we looked at Churchfield Quarter, as well.
‘It’s very low rise here compared to a lot of parts of west London, which we liked, and under normal circumstances we can both get to work very easily: Josh can walk to Chiswick, while I just get the Overground from Acton Central.
‘Shared ownership made perfect sense to us – we could make the most out of the cash we had, and our monthly payments now go partly towards our mortgage. It has been a great investment.’
They completed in April during lockdown but any concerns were quickly dispelled, as Josh explains.
‘Moving during lockdown was a little worrying at first, but L&Q were great and kept us really updated with what was happening, so as soon as we were given the green light we couldn’t wait. It meant that we had so much time at home to really settle in, and being able to sit outside during the fantastic weather was amazing – we didn’t have access to anything like this in our rental.’
One, two and three-bed shared ownership apartments are available at Churchfield Quarter, from £90,625 for a 25% share of £362,500, requiring a minimum deposit of just £4,531.
Breakdown of the costs
- Full market price: £402,500
- 35% share purchased: £140,875
- 5% deposit: £7,044
- Rent: £545pcm
- Mortgage: £623pcm
- Service charge: £250pcm
- Total monthly spend: £1,418
2. ‘Just the security our family needed’
Jenny Ongley and husband David had been renting for more than a decade when they decided to find a permanent base for their family.
‘We’d hoped to buy somewhere in 2008 but the crash hit and postponed things. We’re in our thirties now and have young daughters, so want to give them a place they can put down roots and call home,’ explains Jenny, a civic officer for Kent council.
Buying outright was too expensive and although they were familiar with shared ownership, the new homes they’d looked at were outside their preferred area.
However, Jenny found a home available through shared ownership resale scheme in Rainham, close to where they were living. It was listed on Share to Buy, a nationwide portal for shared ownership homes.
Resale properties are ones that existing shared owners wish to sell on, and buyers must purchase a stake that’s the same size as or bigger than that currently owned.
‘I didn’t expect the house to be so spacious,’ says Jenny. ‘The kids used to squabble about who got which bedroom at our old rental property, but all three bedrooms here are good sizes.
‘It was a doer-upper for sure but David’s a decorator and we knew it could be made ours. And the location was ideal, near our girls’ school and all their clubs.’
The couple quickly purchased the 25% share on offer. ‘The process took three months, and we also found our mortgage through Share to Buy,’ continues Jenny.
‘Because David is self-employed, he didn’t have three years’ worth of accounts, but the sales team smoothed it over and made everything straightforward, rather than a chore.’
As a family, they now have security of tenure, and their monthly overheads work out at £200 per month less than when they were renting. In time, Jenny and David hope to purchase more shares in their home, with the aim of owning it altogether. For now, though, they’re enjoying their new life.
‘The kids are really happy,’ adds Jenny. ‘The house backs on to a nature reserve, so they spend a lot of time running around that. The landlord at our old place kept threatening to sell up, which produced a lot of anxiety.
‘Now we’ve got a stake in something and we aren’t at the mercy of someone else. There’s money left over to buy stuff for the house and the kids. We wouldn’t have that freedom if we stayed renting or bought somewhere outright. This has been a perfect solution.’
3. ‘I was so fed up with renting… it felt like money down the drain’
Ailish Foad, a solicitor in her twenties, moved to London from Reading three-and-a-half years ago to start her training contract. She rented homes in Acton and Stratford before deciding to buy.
‘I was keen to get on the property ladder because I was so fed up of renting,’ she explains. ‘I was paying almost £1,000 every month and it felt like I was just throwing money away.’
Without a deposit big enough to buy a flat outright, Ailish researched her options carefully before settling on shared ownership.
‘I decided against Help to Buy because I was worried about having to pay interest on the equity loan after five years. Buying a shared ownership property enabled me to get a home quickly and with a relatively small deposit,’ she explains.
Last September, she visited the First Time Buyer show – a one-stop shop for first-time buyers with representatives from housing associations and developers all under one roof – and came across Newlon Living, which provides shared ownership homes across east and north London.
She was drawn to Pimento at Goodman’s Fields built in conjunction with Berkeley Homes and located on the edge of the City near Aldgate East station. After viewing, she made a formal application and purchased a share of a one-bed apartment.
‘The development appealed to me instantly. With lots of restaurants, bars and supermarkets nearby, and being so close to Tower Bridge and the Thames Path, the area has everything,’ she says.
‘One of my priorities was to keep my commute as short as possible and I can now walk to work in less than 15 minutes. The Newlon sales staff were very helpful and answered all of my questions quickly, even the tricky ones. I instructed solicitors at the end of October and got the keys by December.
‘I really enjoyed living in a flat share, but it’s great having so much space of my own. I love everything about my home – the location, the decor… and best of all that it’s mine!’
Pimento at Goodmans Fields has sold out, but shared ownership homes are available at various locations including Nest E10 in Leyton, where one, two and three-bed apartments start from £81,250 for a 25% share of £325,000.
4. ‘I was fed up paying for some else’s mortgage’
After living in Camberwell for a decade, 39-year-old IT consultant Duncan Mackay, together with his partner, Kinga Gyorgy, a nanny, had moved out of the area into a flat in East Dulwich, close to Kinga’s place of work.
However, he always knew he wanted to come back. ‘We were renting in East Dulwich but were fed up of paying someone else’s mortgage,’ he explains.
The couple wanted to move back to Camberwell, but prices are high and they realised shared ownership would be the way forward. So they were delighted when they found out about Wing Of Camberwell, a shared ownership development from Hyde New Homes.
Duncan was impressed by its central location and high specification, and the pair were successful in their application for a two-bed flat.
‘As I had already made my mind up about shared ownership, it only took a few weeks to arrange the mortgage and secure our new home,’ he says.
He and Kinga are looking forward to putting their own stamp on the place, and see themselves living there for some time to come.
‘Shared ownership is worth it because we actually own our own home, can make changes to it and are making a sound investment.’
Wing Of Camberwell has now sold but you can find similar Hyde New Homes properties.
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