Buying a property on the open market in London is increasingly reserved for the elite, according to a report by property portal Share to Buy, with data showing that first time buyers could take 11.2 years to save for a deposit for a one bedroom home or studio apartment in the capital.
Without the assistance of alternative home ownership schemes, such as Shared Ownership, buying a property is seemingly only available to some of the city’s top-earners. The figures show that the median income of a first time buyer in London now averages at £66,111, which is more than three times the average UK salary and exceeds the mean earnings of those working in the Finance and Insurance Services in London.
The report reveals that the typical deposit required to purchase a one bed or studio apartment is £77,407, and £112,555 for a three bedroom home. With many buyers unable to ‘go-it-alone’, over a third reported that a proportion of their savings came from a gift or loan from family or friends.
However, Shared Ownership offers an alternative route onto the property ladder, giving buyers the chance to find a home to call their own at a much more affordable price.
The same study shows that Shared Ownership buyers in London have an average deposit of £24,358 – less than a third of the typical open market requirement. Minimum deposits for Shared Ownership homes in London average at just £6,335.97 for a one bed, or £8,390.60 for a three bedroom home.
The medium household income of London-based registrants on Share to Buy is £42,000 – almost 40% less than the average first time buyer in the capital.
Shared Ownership offers buyers the opportunity to purchase a percentage share of a property (between 25% and 75% of the home’s full market value) paying a subsidised rent on the remaining share. Buyers can choose to purchase additional shares as and when they can afford to – also known as ‘staircasing’ – allowing them to ultimately own their home outright.
Nick Lieb, Head of Operations for Share to Buy, the UK’s largest portal for Shared Ownership homes, comments:
“There is no doubt that home ownership is becoming increasingly out of reach for many in the capital. Our figures show that schemes such as Shared Ownership really are the most achievable – and perhaps only – route onto the housing ladder for many first time buyers. At Share to Buy, we are proud to be working with some of the sector’s largest home ownership providers, who are battling a challenging market and dwindling funding to deliver truly affordable homes in sought after areas across the capital.”
Share to Buy is the UK’s largest portal for Shared Ownership homes. To date, the website has received over 250,000 registrations in London alone and more than 1,200 properties are listed from some of the UK’s largest providers of alternative home ownership schemes.