Over time, they can buy further shares in the property if they wish, through a process known as staircasing, until they own the complete home.
Property Booking says the recent surge in Shared Ownership enquiries is owed to recent promotion of the product. The Conservative Party recently pledged to reform the structure of Shared Ownership, making it easier for buyers to staircase in smaller amounts.
Additionally, the National Housing Federation launched a campaign to substantially raise the profile of Shared Ownership just weeks ago.
Jimmy Acton, director at Property Booking, says: “Shared Ownership has been around for years, but it is only recently that we have seen the product gain momentum really come into its own. With more government backing and an evolving understanding of the product, it is clear that demand is on the rise. The affordable nature of Shared Ownership, combined with an increased desire to get on the property ladder, means that we can expect see this interest continue.”
While only one in 100 homes is offered for sale via Shared Ownership nationally, its popularity is rapidly increasing – especially in areas where property prices have massively outstripped income. In Cambridge, for example, 5.4% of homes are now listed for sale with Shared Ownership, and the product is increasingly popular in London, Plymouth, Birmingham and other hotspots.
“Owning your own home is still seen as an essential life goal for most Britons, so it’s not surprising to see such an affordable way of putting down roots becoming more popular,” continues Acton. “Shared Ownership not only offers much more security than just renting, it also allows you to share the benefits of an asset that is increasing in value.”
He says young people who are part of Generation Rent are often paying huge sums to landlords every month and struggle to get a mortgage as they aren’t able to save up a sufficient deposit. Therefore, Shared Ownership is proving to be the key to unlocking this problem, allowing people to own their own home at their own pace, while having the security of a controlled rent that usually works out much cheaper than they were paying on the open market.
The product is open to households with an income of up to £80,000 (£90,000 in London), which Property Booking says reflects the fact that even buyers in good employment struggle to fund their own home on the open market.
Figures from the firm reveal that the average buyer looking at Shared Ownership has managed to save up a deposit of £21,000 with a household income of £49,000, despite being on average 25-35 years old.
“These figures show just how committed people are to the idea of becoming property owners, and how willing they are to sacrifice and save,” says Acton. “Shared Ownership offers them the chance of having the key to their own front door considerably sooner, with the flexibility to increase the amount they own as their careers become more established.”
Acton predicts that the popularity of Shared Ownership will continue to increase as long as house prices continue to rise.
“We are also expecting to see greater numbers of home-movers looking at shared ownership,” he adds. “At the moment, most Shared Ownership buyers are venturing into property for the first time, but it is also open to those who need to move to a larger or more suitable home but are unable to do so.”
He concludes: “With the current open-to-all Help to Buy scheme ending in April 2021 and the new scheme being open only to first-time buyers, we are expecting an increase in second-steppers looking at Shared Ownership as the cost of upsizing on the open market becomes out of reach.”