Most young people in London are incapable of purchasing even the minimum percentage of a property through Government-backed shared ownership schemes according to recently released research. A study by Which? has revealed what most have been reporting anecdotally for some time.
That the capital’s shared ownership schemes, designed to help first-time buyers onto the property ladder, are, in the main, beyond the reach of those they are intended to help.
Which?’s research found those aged under 30 earning an average of £27,900 a year would not meet the affordability criteria for 76% of the 525 properties listed on the Mayor Of London-backed Sharetobuy.com website within a 20-mile radius of central London.
To meet the mortgage repayments, rent and service charge a salary of £37,300 would be required.
It also found none of the 28 properties listed in Zone 1 and only 10% of the 77 in Zone 2 could be purchased by someone on an average salary in that age bracket.
Even in Zone 4, nearly 60% of properties were unaffordable for those under 30.
The report also found that London was responsible for most shared ownership sales in the UK with the average buyers between 2015-16 recording an annual income of £45,000.
Which? Mortgage Advisers principal mortgage adviser David Blake said: This research demonstrates the impact of rising house and rental costs in the capital.
"Buyers need to be realistic about what they can borrow, and I would suggest that they look at numerous shared ownership properties as rents can vary considerably.
“That said, it’s not all doom and gloom as the mortgage market is very buoyant right now and lenders certainly have an appetite to lend to first-time buyers.”
Anyone with a household income of less £90,000 inside London is now able to buy a shared ownership home.
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