So how much is home ownership? If you are a first time buyer you need to see what schemes offer you the best path to homeownership. As house prices continue to rise, getting on the property ladder can seem increasingly difficult for everyone. Unfortunately, lowering your weekly coffee consumption and cancelling that gym membership won’t solve the problem.
Everyone has a different path ahead and with a range of circumstances, your experience towards homeownership is completely individual. It’s important you consider these factors and weigh them up against the available options.
We understand it can be difficult to understand the options, so here’s a working example of the UK’s average property price of £264,000.*
*Please note, these figures are estimated calculations. When looking at a property, ensure you receive the correct financial information through a registered provider. Figures will differ depending on location.
Home ownership by age in 2022
According to Statista over 35% of home ownership is by those 65 years or older. Just under 20% for those aged between 55 and 64. A similar percentage for those aged 45 to 54. For those aged between 35 to 44 it’s just under 16% and less than 10% for those aged 25 to 34. Less that 0.7% of home owners are under the age of 24.
Shared Ownership – 10% and 25% share examples
Shared ownership involves purchasing a share of your property and paying rent towards the share owned by the housing provider. As you are purchasing a certain percentage, the deposit and your mortgage are based upon this. The below is an example for 10% share:
Deposit (based on the minimum of 5%): £1,320
Value of Share (based on the minimum of 10%): £26,400
Mortgage Repayments (based on 3.5% interest rate and a 25-year term): £126
Estimated Monthly Rent (to cover the remaining share): £545
Estimated Monthly Cost (excluding service charge): £671
Based on a 25% starting share. With this in mind:
Deposit (based on the minimum of 5%): £3,300
Value of Share (based on 25%): £66,000
Mortgage Repayments (based on 3.5% interest rate and a 25-year term): £314
Estimated Monthly Rent (to cover the remaining share): £454
Estimated Monthly Cost (excluding service charge): £768
Legal and General offer a fantastic online calculator (which we used here), which offers an abundance of information including estimated income necessarily.
Help To Buy: Equity Loan
The Help To Buy Equity Loan scheme is for first-time buyers only and assists those wanting to buy a home by lending up to 20% of the cost of a new build. For the purpose of this calculation, we selected property in the South-West of England.
Deposit (based on the minimum of 5%): £13,200
Help to Buy Equity Loan Value (based on the maximum of 20%): £52,800
Mortgage Required: £198,000
Estimated Monthly Cost (based on a 3 year fixed mortgage with an interest rate of 2.2%): £859
Please note, different areas of England have different price caps. Savills (which we used here) offer a great online calculator and can provide further information on these caps and the maximum loan amounts.
First Home Scheme
The First Home Scheme offers first-time buyers certain properties at a discounted market price. The price of the property will not increase, so local communities can continue to benefit when trying to get their first home.
Discount of Market Price (based on 30%): £79,200
First Home Scheme Price: £184,000
Deposit Required (based on a minimum of 5%): £9,240
Estimated Monthly Cost (based on mortgage rate of 2.5%): £850
L and C Mortgages offer a fantastic Mortgage Calculator (which we used here), providing information on how much you can borrow and how much it may cost you.
Right To Buy
The Right To Buy scheme offers council housing tenants the opportunity to purchase their rental home for a discounted price. The amount can differ depending on:
- How long you’ve been a tenant
- The type of property
- Your postcode
- Property value
In order to fulfil a calculation, our example includes a tenant of 3 years, who lives in a terraced house in Wiltshire.
Discount due to Right To Buy: £84,600
Property Price after Discount: £179,400
Estimated Monthly Cost (based on a mortgage rate of 3%): £850.74
We recommend using the Own Your Home calculator (which we used here) for a better understanding of your area.
Rental
If purchasing a property isn’t an option, don’t worry – there are an assortment of affordable rentals available! Defined as no more than 80% of the local market rent, affordable housing is still a great option.
Average UK Rent: £1,064
Affordable Housing Rent Per Month (based on 80% maximum): £851.20
In Summary*
| Tenure (based on property worth £264,000) | Estimated Monthly Cost |
| Shared Ownership (10% share) | £671 |
| Shared Ownership (25% share) | £768 |
| Help To Buy: Equity Loan | £859 |
| First Home Scheme | £850 |
| Right To Buy | £850.74 |
| Rental | £851.20 |
*Please note, these figures are rough calculations. They exclude service charges and are for illustrative purposes only.
Where can I find more information?
Here at MovingSoon, we aim to make affordable housing as accessible as possible. With an array of knowledge, we’re here to help you understand the market a little better.
Head over to our Frequently Asked Questions to learn more, or get in touch if you can’t find the answer to your query.
