We continue our weekly series of interviews with senior figures from Britain’s housing industry continues as we speak to Kush Rawal, sales and marketing director at Thames Valley Housing, about the wide appeal of the government-backed Shared Ownership purchase initiative.
Please tell us a little about yourself and Thames Valley Housing
My career in property started while I was at university when I worked for a local estate agent. After graduation, I came across Shared Ownership and started working as a sales and marketing assistant to help promote the scheme with Thames Valley Housing. That was 10 years ago now and working in property is just as exciting now as it was then.
Thames Valley Housing has recently celebrated its 50th birthday – marking a huge milestone for the company; we’re set to expand our build programme later this year to create even more homes and give more people the opportunity to get a foot on the property ladder.
Do families comprise a big proportion of the customers who approach you about Shared Ownership and other assistance schemes?
Surprisingly no! In fact, single buyers make up the majority at Thames Valley Housing. Over the last three years, our typical buyer has been 33-years-old, earns £30,000 per year and has a deposit of £12,000. Compared with the UK’s typical first-time buyer figures (aged 35, earns at least £41,000 a year and has an average deposit of £33,000) it’s easy to understand how Shared Ownership is valuable way of helping first-time buyers afford their new home. In central London of course, it’s even more difficult for them – buyers typically need £80,000 to £100,000 deposit!
But there are a lot of misconceptions about Shared Ownership, which may explain why families and couples make up the minority of our shared owners. Our wide range of properties, from one-bedroom apartments to four-bedroom houses - available in a variety of tenures - means there is a home to suit everyone and an accessible entry point to be able to afford each home. Families really can benefit greatly from the scheme which is something we are promoting as much as possible; for couples wanting to start a family or a parent who is now on their own with children following divorce, it can be a lifeline to owning a home large enough to give the space and lifestyle they need.
What do families have to bear in mind about buying a home using either Shared Ownership or Help to Buy?
People must take a long-term view when buying a home through Shared Ownership; they need to be able to manage the cost – not just the mortgage but the discounted rent on the share they don’t own and any service charges. They mustn’t stretch themselves to buy too large a share and then find a few years down the line that they can’t afford it; at the moment mortgage interest rates are still very low but what if they change? It’s better to buy a smaller share (and even save any surplus cash) and then slowly buy more shares as their income increases until they can eventually own 100% of their home. That’s why we introduced Shared Ownership PLUS over three years ago to make this easier to achieve.
It enables shared owners to buy an extra 1% of their home each year, without the hassle – and cost – of arranging a solicitor each time a share is purchased. In the first year, the price homebuyers pay will be 1% of the property’s full value, there will be a fixed price increase of 3% every year after that for up to 15 years as long as the share doesn’t exceed 79%. In short, it gives homebuyers flexibility – as incomes increase – (perhaps they meet a partner so there are two household incomes, achieve promotion or inherit some money), so does the option of buying more shares.
Since our launch of this unique scheme back in November 2013, around 200 homeowners have signed up to Shared Ownership Plus. Of these, 20 have already taken up the option to increase their share in the first quarter of this year, that’s compared to 20 for the whole of last year so we know it’s beginning to work and help people.
Help to Buy is another brilliant way to buy but homebuyers need to be aware that the 20% loan from the government is only interest-free for the first five years, so buyers need to factor in these additional costs too.
We pride ourselves on great customer service so we ensure any homebuyer, whether buying through Shared Ownership or Help to Buy, is aware of all the costs involved upfront so they are confident they are not stretching themselves financially and are making the right decision.
Is there an eligibility implication of a salary-earning child leaving a Shared Ownership home, or a child growing up and starting to earn?
There are only financial implications if the child is registered the owner (or one of the owners) of the property. If they are not, then there is no issue with a salary-earning child living in the family home or for that matter leaving when they want to – children don’t want to live with their parents forever and usually want to leave as soon as they have the independent means to be able to do so! They may want to buy their own share of a home of their own.
Have you found first-time buyers getting older in recent years and being families now rather than couples and single buyers?
Yes, we have noticed the average age of first-time buyers using Shared Ownership has increased; this is largely due to affordability especially here in London and the South East. With the price of homes rising dramatically over the past 10 years, it’s meant the typical age of a first-time buyer – who has a large enough salary for a mortgage and has saved enough deposit – is much older. This situation is unlikely to change in the immediate future which is why buying through Shared Ownership is the only way most people are going to be able to afford a home of their own. It’s why we need to build more!
But Shared Ownership is not just about affordable homes for younger people. It helps people in all kinds of situations; divorcees who may have already owned a property but need help affording another home on their own (and probably with children), or retirees using the scheme to free up cash in retirement - as long as they meet the eligibility criteria, they can apply for Shared Ownership to buy their home.
Do you have any notable family properties for sale right now and what's in the pipeline?
Woodbridge in Frimley, Surrey, is a new development comprising a mix of refurbished and new one and two-bedroom apartments and four-bedroom houses, which have an excellent specification in a brilliant location. The homes are situated opposite Waitrose and near Frimley train station, which has frequent links to London Waterloo in little over an hour.
There are some excellent schools in the area, making the houses very attractive for families. All this, including the availability of Help to Buy, creates a very appealing proposition.
Looking ahead, we’ve more family homes coming to the market in a range of tenures – not just Shared Ownership - across London and the South East which are aimed at buyers of all ages and lifestyles to get a foot on the property ladder.
What are the advantages to families considering a new build over a re-sale home?
The main advantage to choosing to buy a brand new home is the savings that can be made on maintenance. Most second hand homes need redecorating at the very least but often need more major things repairing or upgrading such as kitchens and bathrooms. New homes also come with a ten-year guarantee against major defects which gives even greater peace of mind.
It costs around £45,000 to upgrade a second-hand home to the same standard as a new build, according to research from the Home Builders Federation, so buying new is a great option for families who want to spend their money wisely and move into a high-specification home which doesn’t need any DIY or improvement works.
Find out more at tvhsales.co.uk ; 020 8607 0550