There has been a surge of first time buyers chasing the 1% of the market which is available via the government-backed Shared Ownership scheme, it has been claimed.
First time buyer portal PropertyBooking.com which is endorsed by the Mayor of London says it saw a 62.4% surge in shared ownership enquiries during January.
Offered to buyers for properties sold by agents and developers, and promoted heavily on Rightmove and other portals, the scheme is the most affordable way to get on the property ladder for first time buyers, who can put down small deposits, must buy at least a quarter of the property and then pay rent on the outstanding debt.
Over time, they can buy further shares in the property if they wish, through a process known as staircasing, until they own the home outright.
PropertyBooking.com says the surge in shared ownership enquiries is not part of the wider market pick-up since the election.
Instead it pins the rise on both Conservative campaign promises to improve the scheme and make it easier to staircase in small increments, and a huge marketing campaign by the National Housing Federation; many Shared Ownerships are bought through housing associations.
Jimmy Acton, Director at PropertyBooking.com says: “Shared Ownership has been around for years but it is only recently that we have seen the product gain momentum really come into its own.”
But the scheme has been heavily criticised in the past because many properties available to buy using the scheme, including houses, are leasehold and some buyers become trapped when service charges rise steeply and unexpectedly, while others who cannot keep up payments and lose everything.