Shared Ownership Mortgages and affordable housing schemes are helping people to get onto the property ladder.

As the country enters a severe housing slump, shared ownership mortgages are aiding people to overcome the problems facing those trying to get onto the property ladder.

The Problem with the Housing Market

We have been experiencing a housing boom, where buy-to-lets were rife and everyone was trying their hand at property development. People were making money hand over fist at a time when the value of a property was going well over what it was actually worth. The average individual could not afford to buy, so many looked at 100% mortgages or even 125% mortgages, borrowing more than they could really afford.

We created a credit culture of people borrowing to afford instead of working out what they could afford before taking out credit.

The back lash of the credit culture has created the ‘credit crunch' that we are all experiencing, so those who bought a year ago are now looking at a house that has depreciated by as much as £50,000 in 12 months. Mortgage rates have gone up and home repossession have also gone up by 24% in 12 months.

With house prices coming down all around us, the market is said to be a ‘buyers market', but these buyers need to have a decent deposit in order to get these deals/ steals on the housing market. A decent deposit is 10% and this does not include all of the fees that go with it, and with the average house now costing £180,000 you are going to be looking at the best part of £25,000.

First time buyers have been priced out of the market for a number of years, but the current situation is making it almost impossible for everyday first time buyers to make the leap from mum and dad's or rented accommodation into home ownership.

How can I get into the property ladder ?

If you don't have a huge deposit or have recently landed a wind fall, then you might want to look at shared ownership.

Shared ownership, as the name describes, allow you to share the ownership of a property. This is usually done through the housing association where you buy part of the house and rent the other share.

The share that you take in your shared ownership scheme depends entirely upon the type of scheme and how much you can afford. The amount usually comes to either a more than renting the property would be or around the same amount.

Shared Ownership has been opened up to all first time buyers who earn under £60,000 a year as well as key workers, who the shared ownership scheme was originally designed for. Shared ownership is now opening up the possibilities for everyone trying to buy in the current market.

How can I get a shared ownership mortgage?

The first step is to contact your local housing association who will advise you of the options in your area and the schemes that are available to you.

Next you can start to look for properties, or perhaps you are lucky enough to be able to buy the property that you are renting, and look at getting yourself a mortgage.

It is important that your shared ownership mortgage fits you and not the other way around. You need to make sure that the mortgage will work with your situation, so make sure that you shop around or speak to a mortgage broker who can advise you correctly.