Sharing the way to success
OVER recent years, shared ownership has been an increasingly popular option for first-time buyers to get on the housing ladder, as property prices – particularly in London – vastly outstrip the starting salaries of many young people.
But this week it received a further boost with Chancellor of the Exchequer Philip Hammond exempting those purchasing their first property from stamp duty in transactions of up to £300,000.
The change, which applies to England, Wales and Northern Ireland, but not Scotland, which has a different system, will mean, Mr Hammond says, that 95 per cent of first-time buyers will see stamp duty cut, while 80 per cent will pay none at all.
Stamp duty is paid on all residential properties worth more than £125,000. The duty is levied at a staggered rate above that threshold, starting at two per cent but increasing in line with the value of the property being bought.
One housing association likely to see an increase in demand for its shared-ownership homes is Hightown, which offer a range of properties from one-bedroom apartments to four-bedroom houses.
Prices range from £120,000 for a one-bedroom apartment (a 50 per cent share of the £240,000 openmarket value) to £185,000 for a threebedroom house (again, a 50 per cent share of a £370,000 property).
Stamp duty is payable on the full open-market value of a sharedownership purchase, but the Chancellor’s changes also mean that for properties costing up to £500,000, no stamp duty will be paid on the first £300,000. Hightown Housing Association has properties across Berkshire, Buckinghamshire, Hertfordshire and Essex, with a wide range of developments in places such as Buckingham, Newport Pagnell, Milton Keynes, Luton and Bishop’s Stortford.
A development called The Grange in the particularly desirable Chalfont St Peter, in Buckinghamshire, has homes from £155,000 for a twobedroom apartment (a 50 per cent share of £310,000).
Hemel Hempstead, Hertfordshire, is another town where there are many Hightown homes – it has built 460 there since 2009 and is planning 450 more over the next five years. This is appropriate since the town is where the association was founded 50 years ago.
Shared ownership was the way that Bernice Beke, 34, was able to buy her own home, after renting for years and saving up. She was able to buy a two-bedroom sharedownership apartment from Thames Valley Housing in Ruislip, Middlesex.
The full value of Bernice’s new home is £415,000. She bought a 40 per cent share for £166,000 and put down a deposit of £30,000. Her monthly mortgage repayments are £597 and the monthly rent she pays to Thames Valley Housing for the share she doesn’t own is £557, together with a £97 service charge.
‘The relief of stamp duty on properties up to £300,000, and on the first £300,000 of properties worth up to £500,000, will enable more firsttime buyers to get on the property ladder,’ said Kush Rawal, commercial director of Thames Valley Housing.
The company also has a development in Battersea, SouthWest London, where there are onebedroom apartments available from £169,500 for a 30 per cent share of the full market price of £565,000. Stonewater is another major developer of shared-ownership homes across England and its chief executive, Nicholas Harris, welcomed the Chancellor’s Budget, saying that it ‘promises to remove some of the major blockages that are stopping affordable homes from being built’.
He added: ‘We’re also pleased to see a commitment to helping young people get a foot on the property ladder with the removal of stamp duty for first-time buyers.’