Affordable housing schemes are helping

Government sponsored schemes are helping potential buyers in the UK to access the housing market by reducing the costs of buying a property, according to research from the Halifax.

The UK-based lender has looked at the typical profile of someone buying a home under affordable housing schemes as well as the type of properties bought and compared them with the market as a whole.

The average price paid for properties purchased under shared ownership, shared equity and other low cost house purchase schemes is 12 per cent lower than the average for all houses, at £161,839, it says.

The highest average price paid using these schemes is in London at £243,841 whilst the lowest is in the North East at £132,684.

Regionally, the biggest difference between the average price paid under low cost house purchase schemes and buying without such assistance is in London where the average price paid is almost one fifth lower, £243,841 against £298,972.

Properties bought under affordable housing schemes are typically smaller, with an average of 4.4 rooms not including kitchens and bathroom/toilets. This is almost one room smaller than the 5.2 average for all houses.

The difference in size partly reflects the fact that 42 per cent of affordable housing buyers are single adults, which is significantly higher than their 29 per cent share of all households in the UK.

Nearly three in ten homes bought under affordable housing schemes are flats. This is nearly double the proportion of all home sales accounted for by flats.

Some 79 per cent of properties bought under affordable home ownership arrangements are newly built properties.

The average age of buyers is 32. Almost half, 49 per cent, are in the age band 20 to 29 with a further 31 per cent between the ages of 30 to 39. In contrast, only a quarter of all house buyers are aged 20 to 29. These schemes are, therefore, enabling more young people to get onto the housing ladder.

The average gross annual income of an affordable home buyer is £26,704. The average income of those buying under these schemes is six per lower than that for all buyers at £28,524. Regionally, the average income of buyers under these schemes varies from £41,947 in London to £22,660 in Yorkshire and the Humber.

‘Affordable home ownership schemes offer a cheaper alternative to buying a home but with the flexibility of allowing the occupiers to increase their share over time. This has been particularly true for first-time buyers who account for the largest share of the market. Of all the various low cost home purchase schemes, those under the builders’ own shared equity schemes and FirstBuy umbrella have proved to be the most popular,’ said Martin Ellis, housing economist at the Halifax.

‘While shared equity and other affordable housing schemes have historically performed strongly, new schemes such as the government’s New Buy initiative will also play a role in meeting demand and helping to support first time buyers,’ he added.