The other day a picture circulated the internet that humorously said “Does anyone have a discount code for right move??” A light-hearted joke about seemingly limitless property prices or a serious comment on the trials and tribulations that average people face when trying to find themselves a home?
In 1990 the UK saw the end of Margaret Thatcher’s government, Aldi opened it’s first UK store in Birmingham and the average house price in the UK was £57,683. A lot of young people saw the start of the new decade as a great opportunity to buy their first homes and that’s exactly what they did. With relatively flexible mortgage affordability, high loan to values and smaller deposits, the UK saw thousands of people climbing easily on to the property ladder. That was then, this is now.
ONS figures show that the 2021 average house prices are now up to £256,000 and London’s average soars above this at £495,000! Unfortunately, these figures can be quite disheartening and the amount of money you need to earn and save in order to secure a straight mortgage on a property is a far cry from what the people of 1990 or before had to go through. But don’t fear, there is hope on the horizon.
As part of an initiative to boost home ownership, the government introduced both the help to buy scheme and the shared ownership scheme with the intention of giving a more affordable and achievable alternative to standard mortgages and lenders are jumping at the opportunity to be involved. Simply put, the help to buy scheme sees the government lending you 20-40% of the value of the property you are looking to purchase interest free meaning that you will require a smaller more affordable mortgage from an actual lender.
With shared ownership you can purchase a share of a property (normally 25% or more), you secure a mortgage on this share which would be significantly less than if you were to try and mortgage the entire property and you pay rent on the other 75% or less of the property. Eventually you can potentially staircase up to purchasing 100% of the share of the property.
Specialist mortgage lender Pepper Money have recently jumped on the band wagon by launching their own help to buy product range. Pepper Money sales director Paul Adams has said: “At Pepper Money, we have a clear purpose to promote greater financial inclusion to a more diverse range of customers. This Help to Buy range will be supported by expert underwriters who take an individual approach to assessing every application. This means that we can provide the opportunity of home ownership to customers who would struggle otherwise.”
At Oportfolio, helping our customers achieve their property dreams is our passion and we understand how difficult buying your first property can be. We are more than happy to talk through both shared ownership and help to buy with anyone who wants to explore their options. Call us today.