Tuesday, August 16

How I bought my own home in London while still in my 20s and you can too



Sometimes, however much you save for a deposit, house prices seem to leap out of your reach. But while buying a property is not easy, you may be able to escape the rental trap through a halfway house – shared ownership.

In a shared ownership scheme, you buy a chunk of the property from a housing association, and pay rent on the rest. Over time, you can build up more of a stake in your home. We spoke to Alix Kelly, 24, who just bought one-bed home in east London. This is her experience.

When I got the keys I cried

When I first moved to London, I lived with my brother. But that had a time limit. Then I rented with a friend in Plaistow, east London. Renting is fine, but you’re lucky if you have a good landlord.

I also wanted my own space, and control over my money. I wanted to set myself up for the future. Rents are constantly growing. I also didn’t like the idea I was paying someone else’s mortgage.

London seems to be such a property bubble – prices are always increasing. So shared ownership seemed to be the perfect way to get on the housing ladder by myself. Applying to housing associations was stressful. I did it by myself, and you are basically being told you can’t afford it.

Then I saw an ad for Peabody. I hadn’t seen other housing associations do that. And they were an organisation other people had heard of. Finding a mortgage was fine. A mortgage adviser helped me with the process, and it was really quick and easy.

All the same, when I finally got the keys, I cried. I was absolutely ecstatic. Although it was a relatively short process it had still felt like a long time. Now I’m putting my own touches on it. I have already started my next set of savings to go towards a bigger percentage of the property. My aim is to get to 100%, but I’ll have to wait and see.

What is shared ownership?

To use shared ownership to buy a home, you need to join a scheme – these are usually run through housing associations. You then buy a share of your home – between 25% and 75% of the property value – and pay rent on the rest.

You can buy more shares in your house after you become an owner. This is called staircasing. If property prices change in your area, the price of shares will change too. So if prices go up, the other shares might be more expensive.

On the other hand, if prices fall you could buy the rest of the house for less. Alix bought her property through Peabody Homes.

You can search for shared ownership properties through Share to Buy. There’s also a shared ownership option on Zoopla. You can also contact the Help to Buy agent in the area where you want to live.

The Government has pledged to open up shared ownership to other builders. So while the number of properties on the market just now is limited, this may change in future.