29th March 2018
First-time buyer's guide to affordable home ownership
Last week the National Housing Federation published their latest Home Truths South West report, highlighting the pressing housing situation in B&NES, where the gap between house prices and earnings continues to widen at more than 13.8 times the average salary. Getting on the housing ladder has never been more difficult for people in our region.
But government-backed initiatives such as Help to Buy and the low cost home ownership scheme known as Shared Ownership are helping, giving millennials the push they need to buy their own home.
A report published by Halifax earlier this year shows that the number of first time buyers has been growing steadily over the past six years and now account for almost half (49%) of all house purchases with a mortgage, compared with 36% a decade ago.
Helping people on the housing ladder
Most Bathonians will know Curo as the largest registered provider of social housing for local families in need of a quality, affordable place to live. But the organisation also helps people struggling to buy a house to get a first foot on the property ladder with Shared Ownership. This article outlines the steps to accessing the scheme and becoming a homeowner.
1. Save up
As with any home-buying process, saving up for a deposit is crucial. However unlike buying a property on the open market, Shared Ownership only requires a minimum 5% of the share that is being purchased - for example, if a property costs £200,000 with a 40% share available to buy at £80,000, the deposit required will only be £4,000. Legal fees and other related expenses usually add around £2,500 to the initial purchasing costs so it's important to budget for these additional costs.
2. Find your dream home
To see what properties are available from Curo on a Shared Ownership basis in our area, go to www.curo-sales.co.uk or www.helptobuysouth.co.uk – where house hunters also need to register their interest once they found a property they like.
3. Find out what you can afford and if you're eligible
After you've registered your interest on helptobuysouth.co.uk, Curo will look at your finances to check if you are able to sustain the monthly mortgage costs, rental and service charge payments, as well as if you have sufficient savings to cover the 5% deposit and other costs associated with purchasing a home.
All Shared Ownership homes are alocated on a 'first come first served' basis, but some properties may also require a 'local connection'– this ensures that local people have priority to homes in an area where they live, work or have strong family ties.
4. View the property and submit your reservation
At this stage successful buyers will be able to view the property they've chosen if the building process is advanced enough and submit an 'off plan' reservation. You'll need to fill in a form with details of your mortgage lender, solicitor and the property chosen. A non-refundable reservation fee of £300 is also required but this will be deducted by Curo from the purchase price.
5. Attend a Shared Ownership interview
Once Curo have accepted your reservation, you will be invited to a meeting with a sales negotiator who will explain the purchasing process. At this point you will also need to show proof of your income and savings. Curo will then send you a letter confirming your reservation and outlining next steps.
6. Secure your mortgage and appoint a solicitor
This is when you need to speak to your chosen bank or building society and proceed with your mortgage application. As standard practice, the lender will carry out a valuation of the home and it will take around 3-4 weeks before your full mortgage offer is released.
You'll also need to appoint your solicitor – it's important to 'shop around' as charges do vary, but if you need help choosing, Curo can put you in touch with solicitors experienced in Shared Ownership. Aside from the solicitor's fee you will need to cover disbursements, searches and VAT costs. The government website www.tax.service.co.uk offers a straightforward calculator to help you find out how much stamp duty tax you'll also need to pay.
7. Exchange contracts
Solicitors will take around 28 days to review the contract and lease, carry out a local authority search and investigate the title of the property before you can sign the contract. They will then exchange contracts with Curo, who will provide at least 10 working days' notice of completion. On the day of completion, you will be met at the property to receive the keys to your new home.
The scheme is available through housing associations like Curo for new build properties and re-sales of Shared Ownership properties. The low cost home ownership scheme is available to first-time buyers, or those who used to own a home but can no longer afford one, with a combined household income of less than £80,000.
For more information about Shared Ownership watch Curo's video at www.curo-sales.co.uk/shared-ownership/buying-options/.
Curo homes available through Shared Ownership now
Curo has a selection of Shared Ownership properties available to buy, with new homes being released periodically. Here are a few properties available right now:
- 8 x two-bedroom apartments at Factory's View in Keynsham with 3 x two-bed houses coming soon
- 5 x two-bedroom apartments at The Meadows in Keynsham
- 2 x one bedroom maisonettes at the Thornbury Fields development in Thornbury
New Shared Ownership properties coming soon at Mulberry Park:
- 2 x two-bedroom houses
- 8 x one bedroom apartments
- 8 x two-bedroom apartments
Below is a cost breakdown example of one of Curo's Shared Ownership properties at the Factory's View development in Keynsham:
Full market value: £246,840
50% share: £123,420
Service charge/month: £65.46
Sinking fund/month: £30.00
For more details go to www.curo-sales.co.uk or call 0345 140 5050.