Difficulties raising deposits for ever-inflating house prices are driving more aspiring homeowners to turn to shared ownership to get onto the property ladder, a mortgage lender has revealed today.
Leeds Building Society said it has received a ‘record number’ of applications for shared ownership mortgages in July.
What’s more, between June and August volumes of applicants seeking this type of mortgage were more than one-and-a-half times higher than in the same period in 2018 and 2019.
Shared ownership provides a more affordable route for budding homeowners to get onto the housing ladder. Buyers purchase a proportion of the property and rent the rest meaning they require a much smaller deposit.
For example, on a home worth £200,000 where the buyer was purchasing 50% – or £100,000 of the property – they would need to save £10,000 to afford a 10% deposit rather than £20,000.
Buyers can purchase a minimum of 25% of the property, although proposed government reforms could see this reduce to 10% to make the purchase even more affordable.
Matt Bartle, director of products at Leeds Building Society, said: “Many, faced with having to find large deposits, struggle to get a foot on the property ladder, but if more considered shared ownership, there is the potential to help many more buyers to have the home they want.
“It will be interesting to see if the trend we’ve observed during the summer months continues into autumn and winter and if choosing shared ownership products continues to gain in popularity among first time buyers.
“The government has recently signalled its desire to widen the scope of the shared ownership scheme further so more homebuyers can benefit.
“We welcome new thinking and different approaches which can help buyers get onto the property ladder and we look forward to hearing more details about the new proposals in due course.”
Contact one of our highly experienced mortgage advisors today on 0121 500 6316 to discuss your mortgage needs.
