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Affordable housing

Getting on the property ladder is difficult, as most first time buyers would undoubtedly tell you. To purchase a property, a buyer will typically need a substantial deposit, funds to cover additional costs, such as stamp duty, legal and conveyancing fees, a full structural survey from a chartered surveyor, plus if it is your first home, all the necessary furnishings.

However, there are a number of ways to make property more affordable, allowing first time buyers to get on the property ladder sooner than they may think possible.

Ex-Local Authority Property

It may be worth considering purchasing an ex-local authority property. Local Authority Properties may not always be as attractive as property built for the private sector, however, they are extremely functional. You may find that by opting for an ex-local authority property you can afford something with more space that is in a better location for local amenities and transport links.

Key Worker Living Programme

The Key Worker Living Programme is designed to help those employed as teachers, police, or in healthcare afford their own homes. To qualify for financial assistance from the scheme, you must either be a first time buyer, a homeowner needing to buy a larger property to meet your household needs (eg family sized homes), needing to take part in shared ownership schemes, or need to rent at affordable prices.

The scheme is only open to a specific key workers in London, the South East and East of England.

Shared Ownership/Homebuy Scheme

A Shared Ownership Scheme allows buyers to buy a portion of their property, whilst paying rent on the rest. Your monthly payments therefore include making a contribution towards the capital repayment of the mortgage, a contribution towards the interest repayments on the mortgage, and a rental payment as well. Priority is usually given to those who will struggle to buy their own property without this type of assistance, and includes key workers, first time buyers, and those waiting to be housed by the council.

The Homebuy schemes operate in much the same way as the Shared Ownership Schemes, but have a maximum ownership of 75%. However, because this is the maximum ownership, rent is not required on the remaining 25% once the 75% balance has been paid.

125% Mortgages

The 125% mortgage allows you to borrow the entire value of your home, plus an additional 25% to cover the additional costs and fees of purchasing a home. Although this provides a way for many people to get on the property ladder where they would otherwise struggle, many experts warn against such schemes, saying that it plunges borrowers into negative equity, and that many people are taking on unmanageable levels of debt.