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Shared Equity Schemes Offered on 1 in 4 New Homes
Almost a quarter (23%) of new homes are now available to buy using a shared equity scheme, according to leading new homes website SmartNewHomes.
The website can reveal that housebuilders are focusing on offering more shared equity options to make home ownership more affordable for first-time buyers.
As it becomes increasingly difficult to raise the large deposits required to buy their first home, would-be buyers on average incomes are turning to shared equity offers.
Lenders now offer significant support for those only able to afford a percentage of a property. Housebuilders also run a number of private shared equity schemes of their own, inviting first-time buyers to borrow an equity loan alongside their own small deposit, raising a mortgage for the remaining amount. The Government’s FirstBuy scheme is also proving popular where buyers can access a 20% loan provided jointly by the Government and the housebuilder, putting in their own 5% deposit and raising a 75% LTV mortgage.
Steven Lees, director at SmartNewHomes.com, said: “The fact that nearly a quarter of all the new homes on the site are available with shared equity is unprecedented. Housebuilders have had to focus much more on delivering shared equity options to their buyers, helping them to get around the high deposit requirements which make home ownership impossible for most people.”
Despite this large percentage of shared equity homes being offered, figures show that 2011 lost 10% of first-time buyers, compared to the previous year. Halifax reported there were only 86,000 first-time buyers in the first half of this year, a whopping 50% less than in the same period in 2007. Lees said: “Continued investment in shared equity schemes is paramount to the health of the housing market over the next few years, as the economic downturn continues.”
