History and myths of the Open Market Homebuy scheme for England and Wales
HOUSING NEWS UPDATE 19th October 2007
If you want to buy an average-priced house in Oxford, did you know that you will need to
earn at least £78,000 a year to get a typical mortgage ?
The stark reality of the booming housing market has been laid bare in
a report published today. The report shows that property prices in the city are
running at almost TWELVE times average annual salaries in Oxfordshire.
According to the research by the National Housing Federation, an
average home in Oxford costs
£287,781
£40,000 more than the average for the South East
Based on a mortgage of 95 per cent of the purchase price, and using
three-and-a-half times annual earnings, this means that borrowers need to earn
£78,112 a year to buy a house in the city !
Across the county of Oxfordshire, the average price of a home is £269,993 -
which means purchases would need an income of around £73,284 to get a 95 per cent mortgage.
However, according to the Oxfordshire Data Observatory, the average income in
the county last year was £25,086 - a long way short of the above figure.
The situation is now so bad that thousands of people are registering on
housing association waiting lists in the hope of part-owning a property.
One housing group offering shared ownership schemes has more than 1,000 people on
the waiting lists in every council district across the County.
The Group has said that these people would have to wait
"years, rather than months" for a home.
Last night, experts agreed that for those on typical salaries shared ownership
was the best way to get on the property ladder. Google appears to like the new website http://www.sharedownershipmortgages.org.uk we spoke to Ms Leslie MacNaughton at CTAB Mortgage Desk 'With the new affordability calculations imposed by Lenders software for mortgage sourcing, I am seeing many more enquiries for shared ownership mortgages than we do for the Open Market Homebuy Scheme”.
<>Part-buy, part-rent schemes require a mortgage to purchase a percentage of
property - part rent has to be paid on the unpurchased percentage.
Graham MacDonald, co-director of Oxford estate agents Kemp and Kemp,
said: "If you haven't got a great deal of money, I don't think there's
anything wrong with shared equity. "You have got to be prepared to go for
key worker housing or shared ownership - and I don't think there's any disgrace
in that, because it gets you on the ladder. "People want to live here - and the demand
for housing has made the market what it is."
Oxford City Council require that 50 per cent of all new developments of
10 or more homes have to be "affordable" - this demonstrates the importance
they are placing on social housing.
Chief planning officer Michael Crofton-Briggs said: "Yes, we need more
houses and, yes, the City would argue we need to be building more than the
County Council or Regional Assembly thinks is the right number.
"What we need is more afford- able housing and a variety of types, from
the traditional social rented to shared equity, not all our eggs in one basket."
Stewart Lilly, from Harwell, the president of the National Association
of Estate Agents, said: "The main culprit (of increasing house prices)
is a lack of supply. "But sharing equity means you have to be 100 per cent
confident with the person you're sharing it with, because the day could come
when it could all go wrong."
County Council Leader, Keith Mitchell, said: "The need to enlarge the
shared ownership element of publicly-subsidised housing is important,
as more and more people want to own their own home."
National Housing Federation spokesman Simon Graham added: "We have got
to a situation where demand outstrips supply - and there's no doubt
that part of the solution is building more homes."
When Stephanie Roberts, 42, got divorced, it seemed unlikely she and
her eight-year-old daughter Hanna would be able to find a property to
buy in Kingston Bagpuize, where they lived. However, their new two-bedroom home,
in Oxford Close, is one of three sold through a part-buy, part-rent package.
Ms Roberts managed to buy a 40 per cent share in the £172,500 house
and rents the remainder at a reduced rate from Sovereign Housing Group.
She said: "Having been a homeowner before, I didn't really want to
rent privately, but buying another house outright would have been a
big stretch. This is ideal for women who find themselves making a go
of it on their own."
Meanwhile, the Bateman family have swapped a cramped two-bedroom home
for a new four-bedroom detached house in Marcham - their home village.
Laboratory technician Alan, 34, wife Kathryn, 31, and children
Christopher, 13, Jack, nine, Nathan, eight, Josh, five, Jake, four and
Samuelall, two, took advantage of a shared ownership development
in the village near Abingdon.
Mr Bateman said: "We've been able to give our eldest his own room for
the first time and the youngest two are in another.
"We've lived in the village all our lives. Although this is a new
development, it's not made any difference to the character of the village."