Shared ownership - replacement for help to buy?

We have always helped a lot of clients with shared ownership, but have definitely seen an increase in enquiries on this recently. For some people it works really well, and is a great way to get first-time buyers that are struggling with affordability on the property ladder. The issue we have seen recently, though, is an increase in the amount of rent that housing associations are now asking for. Choosing the right development is also key, to ensure buyers aren't being stung with high service charges. Aside from these issues, if the property is in a good area, it's affordable and the client can staircase up, shared ownership is usually better than traditional renting.

Shared ownership has a place, but it is not a suitable replacement for Help to Buy. Once in a shared ownership property, many find it difficult to staircase because of the rent they have to pay. Yes it solves a low-deposit problem but the monthly cost is almost the same as having bought traditionally. Most clients who pass affordability for shared ownership, pass for traditional ownership too because of this - the rent cost is absorbed into a mortgage payment instead. Help to Buy loans offered ease of affordability due to the nature of being interest-free and then interest-only (at a low rate). Shared ownership is less generous in affordability than this. It's more important that low-deposit mortgages stay as a replacement for the Help to Buy scheme and that lenders continue to innovate their affordability assessments.

The bleak reality for many first-time buyers is that a huge lifeline to get onto the housing ladder has been withdrawn, leaving a huge void. Shared ownership has failed to deliver anywhere near the same numbers that help to buy previously offered and will continue to prevent many people from buying their own home in the future.

Shared ownership is very different to Help to Buy, as you are only purchasing a percentage of the property. However, I have always been a big advocate for this, and we have helped many first-time buyers and home movers buy properties they could never afford if it wasn't for the scheme. However, there are only a few available and competition for those are fierce.

Shared Ownership is not an alternative to Help to Buy. It's like comparing apples to pears. There are different requirements in each of our four nations for eligibility for shared ownership and those borrowers who do qualify for the scheme should give this route to home ownership consideration. It is a proven solution for those with a limited deposit or struggling with affordability who want security of tenure. Unlike Help to Buy, you are not required to purchase the other stakeholder's share within a timeframe and an owner can increase the percentage they own over time. However, there is rent payable on the other stakeholder's share from the outset. An independent mortgage broker can offer information on eligibility, affordability and ongoing costs.

Shared ownership can be a good alternative for many first-time buyers to get onto the housing ladder, especially if they cannot afford a mortgage on a full-ownership property. With shared ownership, buyers purchase a percentage of the property and then pay rent on the remaining portion. This can make it more affordable for buyers to enter the housing market and gradually increase their ownership stake over time. However, it is crucial for buyers to consider the specific terms and conditions of shared ownership schemes and whether they are the right fit for their needs and budget. Shared ownership existed along with the Help to Buy scheme but now is the only option until the government look into what will replace the Help to buy scheme.