Richard Butler Creagh on an affordable way for first-time buyers to get on the property ladder
Welcome to the Richard Butler Creagh blog. Despite a high percentage of London’s house prices being some of the lowest performers in the country for growth, the average house price is still far higher than the rest of the country, at roughly £490,000 According to Richard Butler Creagh. The daunting figure of a 10% deposit is still seen as being largely unaffordable for most first-time buyers and young professionals looking to get a foot in the door in the UK’s capital. Therefore, most millennials and young professionals have turned to rent. However, the average rental price in London is currently around £650 a week and can be considerably higher depending on location, number of bedrooms and a number of other variables. All this means that potential first-time buyers are taking longer and longer to save up for a deposit.
Although the Help to Buy Scheme provides a
chance to gain a new build property for the fraction of the price, it still has
its critics and many still feel uncomfortable taking this option due to the
lending restrictions. As a consequence of this many young professionals are put
off buying altogether, unless they are lucky enough to get a loan from the bank
of Mum and Dad.
A little-known alternative to this problem
is Shared Ownership. Shared Ownership gives first-time buyers the chance to buy
a share of their home (between 25% and 75%) and pay a reduced rent on the
remaining share. It is available to you if you earn £80,000 a year or less
outside of London, or £90,000 a year or less in London. It is available on both
newly built homes and an existing property through resale. The idea behind the
scheme is that you only pay a percentage (however large or small) of the
property, then buy bigger shares as and when you can afford it. Thus allowing first-time
buyers a chance to get a start on the property ladder without having to pay the
deposit on a full price house, something not many in their 20s can afford.
Watch the video below to learn more.
At Henley Finance, we encourage any
inventive and new schemes to get onto the property ladder. With RichardButler Creagh once being a first-time buyer we understand first-hand the
difficulties with getting a foot in the door and making that step. The new
schemes in place are evidence that, although it is hard, it’s not impossible to
buy.