Ryan Johnson wished he had discovered shared ownership sooner (Picture: Supplied)
No one could have predicted that the Help to Buy equity loan scheme would end during a period of high inflation, rising interest rates and escalating household bills. The government scheme, which launched in April 2013, tackled affordability by providing long-term loans on new homes up to £600,000 for buyers with five per cent deposits.
Initially, the maximum loan was set at 20% throughout England but in February 2016 it was doubled to 40% in London. From last April it was restricted to first-time buyers only and lower regional price caps were brought in. Then on October 31 last year, it closed to new applicants.
Not everyone mourns the passing of Help to Buy. The scheme has been criticised for pushing up the price of new-build homes and boosting developers’ profits, while concerns have also been raised about the cost of repaying the loan after the initial five-year interest-free period.
That said, it was undeniably popular with first-time buyers. Government figures show that more than 369,000 homes have been bought with an equity loan, and that even when Help to Buy was available to all buyers, more than four out of five were first-timers.
With Nationwide reporting that mortgage payments make up 39 per cent of the average first-time buyer’s take-home pay, the shelving of a major affordable home ownership initiative hasn’t come at the best of times – but aspiring buyers haven’t been left high and dry.
Schemes to choose from include shared ownership, which is suitable for those with a maximum household income of £90,000, or £80,000 outside London. It’s very flexible, allowing you to buy a share in a home that can be increased in the future when you can afford it. You repay on your share via a monthly mortgage and pay rent to a housing association on the portion of the home you don’t own.
Shared ownership is one of the many schemes for first-time buyers (Picture: Getty)
When Ryan Johnson, a facilities manager for a chartered accountancy, found out about shared ownership, he wished he’d discovered it sooner. After renting in Kentish Town for ten years, he wanted to put down roots and buying his own place with quick links into the City was vital for his daily commute to Chancery Lane.
‘My brother told me about shared ownership,’ says Ryan, 38. ‘Notting Hill Genesis’s Heron Quarter at Woodberry Down was the obvious choice as I wanted to stay in north London.’ He bought 25% of a one-bedroom flat with a balcony, moving in last spring.
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‘There’s a real community feel across the development,’ he adds. ‘Manor House station is in walking distance then I’m on the Piccadilly line for about 30 minutes. It’s perfect.’
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