For most young Londoners the prospect of shared ownership schemes offer the promise of an achievable step onto the property ladder. However, research conducted by the product and services advice company Which? has found that most young people cannot even afford the minimum share.
The premise of shared ownerships involved buying between 25% and 75% of a property and paying rent of the remainder, which is owned by the local housing association. Which? found that when your compare the average monthly costs of mortgage repayments, rent and service charges against average salaries, the majority of studio and one-bedroom properties in and around London are still unattainable for many.
“This research demonstrates the impact of rising house and rental costs in the capital. Buyers need to be realistic about what they can borrow, and I would suggest that they look at numerous properties as rents can vary considerably.
“That said, it’s not all doom and gloom as the mortgage market is very buoyant right now and lenders certainly have an appetite to lend to first-time buyers," said David Blake, Principal Mortgage Adviser, Which? Mortgage Advisers.
While shared ownership offers a great boost in helping young Londoner’s get onto the property ladder, those wishing to invest should consider their finances in detail to ascertain whether it is financially viable.