First time buyers thrown a lifeline through new partnership

First Time Buyers struggling to get on the property ladder have been thrown a lifeline with the first in a series of shared ownership homes made available in Newport. 

Wales' biggest building society, Principality, joined up with local housing association, Fairlake Living, part of the Seren Group, to help provide a shared ownership scheme at the new 200-home Barratt site at Foxglove Meadows, Newport.

The scheme provides a more affordable option when compared to outright purchase and is a real alternative to renting in the open market, allowing first time buyers to purchase a percentage of their home while paying a rent to Fairlake Living on the remaining share.

Principality Building Society's shared ownership mortgage allows first time buyers to purchase between 40% and 75% of the property, with the option to ‘staircase', which means buying a further share of the property, upon assessment in the future, perhaps at a time when the individual or family finances have improved.

With 2 beds at Foxglove Meadows priced at just £67,500 for a 50% share, and 3 beds at £75,000 for a 50% share, interest has been high. Combined monthly mortgage and rent payments are typically in the region of £560/month for a 2 bed home, and £620/month for a 3 bed home. Working in partnership with Newport City Council, Fairlake Living has already been able to help the first of many local First Time Buyers to purchase their dream home.

The affordable homes at Foxglove Meadows have been delivered via a planning agreement negotiated by Newport City Council. The Council is committed to extending the range of affordable housing options for local people and shared ownership is playing a significant role in helping to achieve this aim.     

James Wright, Marketing Director at Principality Building Society, said: "Shared ownership plays a key role in today's housing market, filling the gaping gap between social housing and outright purchase. Despite decreasing house prices, home ownership remains out of reach for those at the bottom end of the housing scale. The demand for larger deposits, coupled with tighter lending criteria has had a negative effect on first time buyers in particular and the priority now is to develop intermediate housing products that address the problems faced by this group of borrowers."

In a recent survey, Principality found that two out of every five people in Wales believe that the key to kick-starting the housing market in Wales is for more affordable housing to be made available.

The lack of available credit (15 per cent), the looming risk of interest rate rises (11 per cent) and a shortage of innovative products aimed at first time buyers (10 per cent) were also blamed for the current stagnant housing market in Wales.

Darrell Bolton, Director of Fairlake Living, said: "We are delighted to be working in partnership with Principality Building Society to help local First Time Buyers to purchase their first home through our new shared ownership scheme. Principality's support has been vital in developing this product, and we look forward to offering this opportunity to many more local families in the years ahead." 

The shared ownership scheme will be rolled out across a number of future developments in Newport, Caerphilly, Torfaen and Monmouthshire over the next 3 years.

First time buyer, Bryan Wilson, is delighted with the new 2 bedroom home that he has been able to buy at Foxglove Meadows through the new shared ownership scheme. Working as a local car mechanic and unable to afford the deposit needed to buy on the open market, 25 year old Bryan was able to take his first step onto the property ladder with the help of Principality's shared ownership mortgage.

"The house is brilliant," says Bryan. "I never thought I would be able to afford to buy a place of my own, but shared ownership turned out to be the perfect solution for me."

Foxglove Meadows in Bettws, Newport, offers 2, 3 & 4 bedroom terraced, semi-detached and detached homes.