By Karen Jenkins
Starter Home Initiative, Notting Hill Housing Group
It is no surprise that less than one in five homes are sold to first time buyers, when government figures recently recorded the price of an average flat in London at a record high of nearly £210,000.
The notion of "affordable home ownership" has still not reached the masses, especially in the Southeast, with many key workers and other low-to-medium income earners not being aware of the opportunities open to them.
The government is spending £5bn over the next two years on affordable homes, with £1bn of this earmarked for key workers (NHS staff, police, teachers, fire-fighters , prison wardens, probation officers, council officers and social workers).
It is now a planning requirement that developers allocate a percentage of new developments to social housing, which means the chances of getting an affordable home are greater.
There are a number of options open to people who are struggling to get onto the property ladder.
Some schemes are only open to key workers, such as nurses or teachers - and in areas where there are recruitment and retention problems.
There is a big debate about expanding the criteria to include charity workers, and public transport employees.
However, if you are not a key worker this doesn't mean you are ruled out. There are a number of options:
Conventional Shared Ownership (part buy / part rent) is a very cost-effective way to get onto the property ladder. Based on your household income, you buy a part-share in a home owned by a housing association via a mortgage, and pay a subsidised rent on the remaining share. After a year, you can buy more shares at the current market value, until you own it all.
- Do-It-Yourself Shared Ownership is offered in some areas, and is the same as shared ownership, but you find the property on the open market. The housing association then buys the home, and you buy a share from them.
- Homebuy This is a nationwide scheme, which allows buyers to find a home on the open market and get a 25% loan from the housing association . You fund the remainder with a mortgage, and pay back the 25% when you sell. This is mainly open to council or housing association tenants.
- Key Homebuy allows key workers in London to find a property on the open market (under 90 minutes travelling time from work, up to a value of £210,000) and get an equity loan of up to £50,000 towards the cost.
This is worked out as a share of the value (e.g. £25,000 towards a £125,000 house would be 20%), and is paid back when you sell. Apply before December 19th for a chance to get onto this year's scheme, although West London has already exhausted its funding.
Who is eligible?
Each scheme has its own priority list, related to the local housing strategy - and the council's priorities.
However, there are schemes available to both key workers, and low-to-medium income earners who are registered on their local authority's waiting list.
There should not be any restrictions on who can join this list, but you may find in your area that your case is not considered a priority.
It is important to check with your council or local housing associations to see if you are eligible.
Shared ownership is the most popular affordable home ownership option for non-key workers
In order for any housing association to help you, it is advisable to be on this list.
In order to register, you must usually have been living in the borough for over two years.
Shared ownership is the most popular affordable home ownership option for non-key workers and there are increasing number of new developments in high demand areas.
In London, for example, there are properties being built in trendy areas like Hoxton, Putney and Clapham.
As a rule, the minimum income must be at least £17,000 a year and the maximum household income is £42,000 for an individual, or £50,000 for a couple.
For all home ownership schemes, an EU or British passport is required, or permanent resident status if an overseas passport holder.
Do I need a deposit?
Affordable home ownership schemes eliminate the need to save a hefty deposit.
However, housing associations will ask for up to £3,000 in savings, to cover the normal costs of buying a home - solicitor's fees, stamp duty and so on.
Which Mortgage Lender should I use?
Your housing association can give you details on mortgage lenders and access to Independent Financial Advisers.
How old do you have to be?
There are no age restrictions on the housing association schemes, but you must be able to get an appropriate mortgage.
Contact your local authority for a list of housing associations operating in your area, or if you are a keyworker, visit its website for details of key homebuy schemes available in your area.
Information on home ownership schemes can also be found on the Office of the Deputy Prime Minister's website.
The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.