Buyers who never own all their home: Soaring house prices mean generation will only be able to buy a fraction of property
09-07-2014
Many buyers will be forced into shared ownership with housing associations
They will then have to pay rent on the part they do not own, says report
Schemes designed to help people with lower incomes get on property ladder
By Ruth Lythe for the Daily Mail
Soaring house prices mean a generation of buyers will only be able to buy a fraction of their home, a banking body has warned.
Many buyers will be forced into shared ownership deals, where the rest of their property is owned by housing associations or local developers.
They then have to pay rent on the part they do not own. These deals are already common in parts of the country where house prices are high. But a report from the Council of Mortgage Lenders said in future this could be a way of life for many.
A generation of buyers will only be able to buy part of their home due to soaring house prices, a report warns
Shared ownership schemes were designed to help people with lower incomes to get on the property ladder.
The idea is that borrowers save up and gradually buy more of the house until they own the property outright.
But the CML warned surging house prices mean they may never be able to afford it as the share they are trying to buy keeps going up in value.
Sales of shared ownership homes have soared by 56 per cent since 2009, according to the National Housing Federation, but only a third of buyers have managed to buy their whole home over the past decade.
Shared ownership schemes were designed to help people with lower incomes to get on the property ladder
A CML spokesman said: ‘Affordability pressures may mean that, for some, full ownership is not an option, even in the long term.’ The CML added that more action was needed from the Government to solve the housing crisis.
Paula Higgins, of the Homeowners Alliance, said: ‘This is a wake-up call for the Government to help those frozen out of the housing market. Owning a fraction of a home is not the solution, instead it is storing up problems for the future. It will be deeply sad for parents to see their children unable to afford to buy a home of their own even when they are in their 30s and 40s.’
Housing minister Brandon Lewis said home ownership was at its most affordable since 2007. ‘Shared ownership is just one of many options available to aspiring homeowners,’ he added