Shared ownership for Generation Rent

September 8, 2016 by Brendan O'Neill

Home owners

According to finance experts, the Generation Rent may be able to afford their own property if they consider shared ownership.

As more people are unable to afford to buy a house, shared ownership is a potential solution for those who are having to rent a home. Over the last few years, property prices have continued to rise, while income has failed to keep pace.

In 2003, home ownership levels reached their highest at 71%, but have fallen since then, reaching as low as 64%, including home owners with a mortgage and those who own their home outright. A Mortgage Advice Bureau spokesperson said:

“Affordability stands as the main barrier that can get in the way of people owning their own home. Many future home owners, and home movers, often struggle to find the funds for their deposit and are therefore falling into the renting trap.”

In 2003, 11% of people privately rented their home, while the number has risen to 19% in 2015. A report by the Mortgage Advice Bureau indicates that private renters pay on average 30% of their income on rent, while the average cost for a home owner is 23% of their income.

Shared ownership makes it possible to own between 25% and 75% of a property, with the potential to own further shares in the future. Rent is paid on the remainder of the property. Mortgage advisers have information about shared ownership as they have spent time studying on a CeMAP course and will be able to explain more.