Opening doors to low cost home ownership for first time buyers
With most first-time buyers needing approximately £30,000 for a house deposit, shared equity or low cost home ownership (LCHO) continues to be an affordable option as the first step on the property ladder. Newydd Housing Association, has seen over 20 low cost home ownership properties sold in the last three years, with these purchases being driven by 25 to 35 year olds.
Low cost home ownership means that homes are offered for sale at 70% of the market value under the scheme, with Newydd’s LCHO properties costing on average £96,764. First-time buyers will then provide a minimum 5% deposit, which equates to approximately £4,838 as prices currently stand.
Newydd wants to dispel the myths around low cost home ownership including:
- LCHO properties are built to sub-standard levels: This is false. Newydd homes are built to the same quality as any other property on the market in the area, so that first-time buyers can invest in a quality home, at an affordable price
- You can't make money on LCHO houses so it's not a good investment: This is false. If your home increases in value, so does the value of your 70% equity interest in the property
- Low cost home ownership homes aren't big enough for a growing family: This is false. Most of Newydd's LCHO properties have two double bedrooms and are a great starter home
Victoria Bolton, Development Manager for Newydd said, “Low cost home ownership is that step up that first-time buyers need to get themselves onto the property ladder. With the housing market continuing to be a challenging environment, so we’re proud to be able to offer quality, affordable homes to a vital part of the property chain.
“We hope that by dispelling the myths around low cost home ownership, first-time buyers will be able to see the scheme as a viable option for them.”
Newydd retains 30% of the equity interest in the property, however, following the initial purchase, the home owners can then choose to buy this equity from Newydd. This can be done in full or in agreed staged payments.
Currently, Newydd’s LCHO properties are situated in the Vale of Glamorgan and the association works with the Council’s Aspire2Own scheme to coordinate applications on available properties.
For more information about low cost home ownership, visit the 'Our Homes' page, here.