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Concerns over restrictive shared-ownership deals

Tuesday, 11 September 2007 12:00 AM

Rising property prices have made shared-ownership an attractive option to homebuyers seeking a place on the first rung of the property ladder.

The average house price paid for a property by first-time buyers now stands at £167,314 according to the department for Communities and Local Government; a level unaffordable to many.

In response shared-ownership has seen an upturn in popularity.

The schemes allow buyers to purchase a share in a property owned by a housing association, paying rent on the remainder and gradually increasing their share.

However, some schemes may not be all they seem.

"The gritty reality of shared ownership has not turned out to be the panacea that was promised, some agreements can be very restrictive and would-be first-time buyers are starting to see that the scheme may not be the way forward for them," warns developer McDermott Homes.

The organisation raises several concerns with the shared-ownership schemes:

  • Limited choice: Few properties are available for shared-ownership and waiting lists can be lengthy.
  • Ownership: If you wish to make improvements you will have to seek written permission, and although the housing association is responsibility for the structure of the building, repairs and decoration are the tenants responsibility.
  • Eligibility: Participants must be key-workers and be able to prove they are unable to purchase a property by any other method.

So, while shared-ownership schemes may be attractive to prospective house buyers any agreement must be carefully considered before being signed.

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