However, despite pressures on both renters and buyers alike, the demand for affordable housing is still prevalent, as the rental market has become more competitive than ever.
With high prices causing tenants to stay put for potentially longer than anticipated, coupled with landlords selling up to shore up profits and get rid of their own rising mortgage rates, the supply of suitable property is simply not keeping up with demand.
Tenants who may have previously looked into homeownership as a way to escape the rental cycle may now be finding themselves stranded with high barriers to entry, and stubbornly high property prices keeping prospective buyers on the backfoot. But with the uncertainty seemingly set to continue for a while longer, many are asking themselves whether there is ever a ‘right time’ to buy?
Is shared ownership the way forward?
Given the constant fluctuation of the property market and interest rates, it is hard to pinpoint a ‘right time’ to make the first step on the property ladder.
However, the first step is always the hardest, and for young buyers today, making the move towards owning property is never a bad idea. As challenging as the market may seem, there are options available to first-time buyers, designed to help them achieve their homeownership goals.
One option that is becoming increasingly popular with the first-time buyer market is shared ownership.
When purchasing a shared ownership property, buyers purchase a percentage of the property from the developer, often starting at around 25 per cent. In this process, buyers only require a deposit for the percentage of the property they will own, meaning the financial barrier to entry is significantly lower than a traditional sale purchase. For example, someone buying 50 per cent of a £200,000 property will require a deposit of as little as £5,000: five per cent of the 50 per cent share, making the property and mortgage much more affordable.
A typically lower monthly rent is then paid back to the developer on the unpurchased shares, as well as any service charge that may apply to the property.
One of the benefits of purchasing a shared ownership property is that buyers have the option to increase their shares in the property over time, reducing their monthly repayments to the developer, and owning more of their home in a way that suits their personal finances.
With the economic and market uncertainty of recent years, many could be wary of investing in a property.
However, with some lateral thinking and exploration of new methods of buying a home, the right time to buy could well be now, and prospective buyers could find themselves on the property ladder sooner rather than later.
