Well, the county of Cornwall will shortly launch a scheme of its own.

Their scheme is similar to FirstBuy, but is tailored to Cornwall only. Rather than seeking contributions from developers through section 106 agreements, Cornwall Council will offer the developer the option to sell homes at a discount of up to 40 per cent. This discount will then be passed over to the Council as an equity loan to the purchaser. (First-time buyers would have to take out a mortgage to cover the rest of the cost.) When the home is eventually sold, the Council would be repaid this percentage of the market value by the homeowner. This money will then be used to help other purchasers in the county.

The Council has said that the new scheme will also enable small and local developers to get involved (rather than just volume housebuilders, who are predominantly used in the FirstBuy scheme.)

Any scheme to help first-time buyers and housebuilders should be supported, and Cornwall Council is showing that local authorities can get involved in helping local people.

So what is shared equity? You purchase a property and own 100% of it, but you obtain a mortgage for a certain percentage of the equity (e.g. 75%) and the developer and/or Government holds a charge (mortgage) over the remaining share (e.g. 25%); depending on the scheme, you may or may not pay rent on that 25% share. In simple terms, although you own the property outright, your main lender holds a legal charge over the property and, in addition, the developer and/or Government will secure a second charge over the property to secure the repayment of their share when you sell or decide to pay the equity loan off.

So what is shared ownership? You purchase only a share in the property (e.g. 75%) and the local authority, developer or housing association retains the remaining share (e.g. 25%) and you pay rent on that share. In simple terms, you have a share in the property, which is usually purchased with the assistance of a mortgage, but you do not own the property outright. You can purchase further shares in the property later (up to 100%) and this is called ”staircasing”. This increases your share of the property and reduces the share retained by the local authority/developer or housing association, which  would also reduce your rent payments.

If you are still puzzled, please contact me at sarah.wilkins@mablaw.co.uk and let me help you understand the options open to you.

Many first-time buyers have felt the pinch, with the end of the stamp duty holiday for properties up to £175,000.00 taking place from the 1st January 2010. Now all properties over £125,000.00 attract stamp duty liability. This is an additional cost people are having to budget for from the outset, particularly for many of my first-time buyers who are purchasing new build properties off-plan and due to complete in 2010. Many buyers in the marketplace have wrongly assumed that an exchange of contracts prior to the change meant they avoided this cost – you should be aware that the stamp duty liability comes about on the completion date. First-time buyers are trying to save hard for their deposit, valuation fees, and legal costs, and the stamp duty for the lower end of the market does add to that struggle.

With first-time buyers trying to take that first step onto the property ladder, and some not having the large deposit required, I am seeing more shared-ownership and shared equity schemes through first-time buyer, government-led initiatives. Interestingly, I am even working with first-time buyers purchasing on one Milton Keynes new home development, where the developers are offering their own competitively rated mortgages. This is encouraging news for the first-time buyer, enabling the market to continue to grow and hopefully making moving home for everyone affordable again.

Recent market trends have meant I also see more of my first-time buyers using ‘the bank of Mum and Dad’, receiving financial assistance from their parents in order to take their first step; or, this could just be the parents wanting their children to finally fly the nest! It has been reported in the press that the average age of the first-time buyer has risen from 29 to 30 in 2008, and many confirmed that this move was made with the assistance of their parents. So our next generation property owners are starting to buy later and live at home for longer; after all, it’s cheaper to live at home than it is to buy and rent!

If you need any advice on the first-time buyer initiatives, please contact me at sarah.wilkins@mablaw.co.uk

So what is shared equity? You purchase a property and own 100% of it, but you obtain a mortgage for a certain percentage of the equity (e.g. 75%) and the developer and/or Government holds a charge (mortgage) over the remaining share (e.g. 25%); depending on the scheme, you may or may not pay rent on that 25% share. In simple terms, although you own the property outright, your main lender holds a legal charge over the property and, in addition, the developer and/or Government will secure a second charge over the property to secure the repayment of their share when you sell or decide to pay the equity loan off.

So what is shared ownership? You purchase only a share in the property (e.g. 75%) and the local authority, developer or housing association retains the remaining share (e.g. 25%) and you pay rent on that share. In simple terms, you have a share in the property, which is usually purchased with the assistance of a mortgage, but you do not own the property outright. You can purchase further shares in the property later (up to 100%) and this is called ”staircasing”. This increases your share of the property and reduces the share retained by the local authority/developer or housing association, which  would also reduce your rent payments.

If you are still puzzled, please contact me at sarah.wilkins@mablaw.co.uk and let me help you understand the options open to you.