Shared ownership is generally referred to by the Government as ‘homebuy’, but can also be called ‘part buy/ part rent’. Namely, you generally buy a percentage share of a property owned by a housing association and then pay rent on the remaining share that you do not own, hence: ‘part buy/ part rent’. It is possible to buy a small share initially, such as 25%, and gradually buy the remaining shares in the property in a process known as ‘staircasing’. Not all schemes work on this basis and there are a number of variations on the shared ownership theme, such as Open Market home buy, and other ‘shared equity’ schemes where no rent is payable.

If you are just starting to research shared ownership mortgages/ homebuy schemes, and have not yet been accepted by a housing association, then as your first port of call, you need to get yourself a shared ownership agent. They will then be able to tell you whether you qualify for a shared ownership scheme and take you through how to register for a shared ownership scheme in your area.

Once you have been accepted you have to take in consideration a few of the following – The size of deposit, if any, you are putting down – it is possible to buy 100% of a share and there are lenders out there who will consider this (but the lender will normally require your lease to have a special ‘mortgage protection clause). You also need to think about what share you are looking to buy in the property (e.g. 25%, 30%, 50%) and the rent you can afford to pay on the share you do not own (if any).

A few facts to remember when buying shared property are – Shared Ownership Mortgages make buying a home more affordable because you buy part and part rent your home, Homebuy refers to the Government’s range of Shared Ownership Schemes. And your local housing association manage shared ownership schemes in your area.

Thousands of people face home repossession every year. There could be a variety of reasons for this – failing to meet mortgage arrears, divorcing or separating, constrained by secured or unsecured debt. Through increasing house prices, rising inflation and loss of jobs many home owners throughout the UK are facing eviction and having their homes repossessed. Imagine the fact that you have put all your hard earned cash in to your home and built up a residence you can be proud of just to have your home repossessed and taken away.

The first step towards repossession is the sending of a letter from your mortgage company informing you that you are behind in your payments, and asking you to contact them to explain what you intend to do to remedy the situation.

If you don’t respond within a reasonable time-frame, you’ll be sent another letter underlining the seriousness of the situation and warning of possible legal proceedings if you don’t make contact.

If you ignore this, a solicitor’s letter will be sent giving you 7 days to contact the lender and make an acceptable proposal, or court proceedings will begin without any further notice.

Once it gets to court it’s important to bear in mind that the judge has the power to immediately grant a repossession order if he considers the situation to warrant it. It’s more likely, however, that the judge wll attempt to broker an agreement between the debtor and the creditor which will avoid the need for repossession. This is especially true if children are living in the property in question.

Whatever the judge’s unwillingness to grant a repossession request lightly, if all else fails it will certainly come to this. There will, however usually be one last chance to avoid losing your home as not all orders are acted on immediately, rather being held in reserve by the lender to ensure future payments are made and arrears cleared in some way, even if this takes a long time.

As part of the recent budget George Osborne launched ‘FirstBuy’ – an official scheme to help first time buyers on to the property ladder – so what is it all about?

Osborne says that the new scheme – costing £250m over the next 2 years – will help over 10,000 first tome buyers.

The scheme – scheduled to be up & running by – September will be open to households with an income of less than £60,000 who are able to put down a 5% deposit, though it will only apply to newly built properties within specific developments Successful applicants will be eligible for an “equity loan” worth up to 20% of the value of the property which will mean they will be able to take out a 75% loan-to-value mortgage for the remainder.

For the first five years the equity loan will be interest-free, then in the sixth year interest will be charged at 1.75%, and at RPI inflation plus 1% following that. When successful applicants come to sell their home (or after 25 years) they will have to pay back the loan. The amount due to be repaid will remain at 20%, regardless of the market value at the time of the sale.

Nicholas Leeming at property site zoopla.co.uk pointed out that, according to the Council of Mortgage Lenders, first-time buyers are currently paying an average deposit of £25,000. “This would plummet to an initial £6,250 as a result of the new scheme – a very appealing prospect.’’

He  also said that the scheme “won’t go beyond scratching the surface of the problem faced by the vast majority of first-time buyers, as it’s exclusively for new-build properties, and only around 11,000 buyers will benefit – a fraction of the overall number of potential first-timers”, he adds. “Mortgages are still required, and this scheme leaves lenders, who have had a stranglehold on the market for the last two years, in a win-win situation. Being able to lend to a select group of first-time buyers without the normal level of risk makes lending to those who don’t qualify for the scheme even less attractive.”

The equity loan will be jointly funded by the government and house builders, & is likely to be on a 50/50 basis. The government will be keen for as many developers as possible to sign up, so that properties will be available in most or all regions, though it is reported that of the £250m allocated to the scheme, £210m is earmarked for England, with the remaining £40m to be shared between Scotland Wales & Northern Ireland.

Barratt Homes is already promoting the scheme on its website, where people are invited to register their details for more information. The scheme is likely to be run by the Homes and Communities Agency in England which looks after the various HomeBuy schemes introduced by the previous government.

A sceptical Matt Griffith from the first time buyer pressure group PricedOut had this to say about the scheme: “When independent economists are predicting a 10% fall in house prices this year, having the government encouraging first-time buyers to get on to the ladder using a 5% deposit looks foolhardy at best and, at worst, pretty irresponsible.”

He added: “George Osborne is behaving like a shopkeeper trying to shift overpriced stock by offering a clever financing scheme. Consumers would be wise to be sceptical and steer clear – the big problem is that prices are still far too high. Its main purpose appears to be to help bail out the house building sector – which is suffering from buying too much expensive land at the peak of the boom.”

The most important factor when choosing to manage your personal finances effectively is time. A greater time investment will almost always result in a greater financial return.

Therefore the sooner you start to manage your finances, the greater return and financial ease you will feel in the future. Many people fail to plan ahead, which results in struggling to juggle finances at a later point in life.

Money management should focus on four primary questions:

1.       What financial goals would you like to achieve?

2.       When can you expect to achieve them?

3.       What finances do you currently have?

4.       What level of risk would you make to achieve these targets?

Choosing somewhere to live is an essential in everybody’s lives, and therefore, buying a house will be the biggest financial purchase that people will make. The financial investment into a home will affect all your other finances.

Making big decisions on your lifestyle will affect your financial goals. If you consider a luxury holiday to be one of life’s essentials, you will have less money left over for savings and investments.

When do you want to retire? What expenses do you currently have? Deciding what your priorities are will help to determine what money you will have left.

It is worth assessing your current liabilities, as these expenditures and assets could be reduced or sold and free up money for the future.

Calculate how much spare money you have so that you can form an investment plan. Investments can vary dramatically. Some are high risk for higher reward or loss, and some are low risk for a steady growth on investment. It’s up to the individual to decide what level of risk you are prepared to make.

Once these considerations have been made and your plan is in places, it’s important to assess the decisions you’ve made and how they affect you on a day to day basis. You plan may be too restrictive, leaving you with not enough money to live on, or perhaps you could make greater short term sacrifices to benefit you in the long term.

A small amount of time spent on your current finances can be highly rewarding for your future.

The Council of Mortgage Lenders (CML) has revealed that the number of new mortgages granted for August is down by 3,000 from 56,000 in July to just 53,000.

Despite such a large fall in granted mortgages, this is still 29% higher than last year’s figure for August.

The CML believe that house sales may have reached a plateau, as most first-time buyers still have to provide large deposits.

Overall, the total value of mortgage lending for buy-to-let and remortgaging for the past year is down by 36% on last years figures.

Long Recovery

The CML’s economist, Paul Samter believes “house purchase activity has revived from its moribund state at the beginning of the year.”

“It will be a drawn-out recovery process with seasonal ups and downs, but house purchase activity is now on a firmer footing.”

According to the CML’s figures, first-time buyers need to find on average 25% deposit in order to receive a home loan.

Regardless of whether a borrower is a first-time buyer or not, two-thirds of all mortgage deals require at least a 25% initial payment.

Relaxing

The Bank of England has claimed that the number of new mortgages approved in August, but not lent, has fallen for the first time in eight months.

From 52,317 approvals, down from 52,404 in July, is a sign that levels may be beginning to level off in the coming months.

Data shows that the number and value of house purchase loans is higher than a year ago, the total value of mortgage lending has dropped by a third.

Standard variable rates are very low, giving borrowers much less incentive to remortgage their house or seek out fixed rate mortgages elsewhere. Buy-to-let mortgages are also down  on a year ago.

“At £12.3bn, gross mortgage lending - which encapsulates all mortgage lending activity, including house purchase, remortgage and buy-to-let lending – declined 36% from August 2008,” the CML reports.

House Prices

The autumn of 2007 saw the onset of the credit crunch, with house prices taking a sudden downturn. Over the past few months, house prices have been steadily rising, giving hope that the recent recovery may become more prolonged.

House prices rose by 2.8% in the 3 months leading up to September, in contrast to the 3 months prior according to the Halifax; the first quarterly increase for two years. Further support to the encouraging recover was made when the Nationwide confirmed that house prices have risen continuously for the past 5 months and have returned to the level of September 2008.

Sales have doubled between January and August and the market seems much more stable in comparison.

Experts have warned, however, that the rise in house prices is supported by the shortage in new properties being put on the market. If there is a sharp rise in houses placed on the property market, the rise in house prices may come to a sudden halt.

The Council of Mortgage Lenders (CML) says that UK house repossessions fell 10% in the second quarter of the year compared to the first.

However, there was still a rise of 14% of homes being repossessed compared with the same three months last year.

The group believes low interest rates, early advice for struggling homeowners and tolerant lenders are helping, but with unemployment still rising, more and more households will get into difficulty.

Low interest rates means those that are falling behind on their mortgage repayments is levelling off.

The number of home loans with arrears of over 2.5% of the mortgage balance in the second quarter of this year was 205,600, compared to 203,900 at the end of last quarter, and 139,700 this time last year.

Negotiations

But separate figures show that there may be a future rise in repossessions yet. The number of court repossession actions started bounced back in the second quarter of the year, rising 10% compared to the first quarter. Repossession orders given by judges also rose at the same time by 16%.

Homeowners can still negotiate with their lenders to stay in their homes at this stage, but nearly half of the repossession orders were suspended as judges allow borrowers to negotiate a deal with mortgage lenders.

The CML say the figures show lenders aren’t being aggressive about lack of payments, but do issue a warning: “with unemployment rising and the economy still weak, the outlook will remain challenging for the rest of this year and into 2010.

“Clearly, low interest rates are also helping borrowers who are committed to working to resolve their arrears, paying what they can – and when they can – towards their mortgage, and maintaining good communication with their lenders.”

Second Wave Still To Come?

The CML recently reduced its estimated number of repossessions in the UK to 65,000. However, homeless charity, Shelter, believe there may be a second wave of repossessions when interest rates rise again.

Kay Boycott from the charity said: “Despite many lenders using more tolerant measures to help their customers, further action is needed if we are to prevent a second and more devastating wave of repossessions.”

CML and the government believe free advice to those falling behind on their repayments and ‘last-gasp’ advice in repossession courts has allowed many to keep their homes. But similar schemes  – such as those to allow people to sell their home to housing associations and live as tenants – have had a slow start.

 Fifteen households completed the ‘mortgage rescue’ process in England by the end of June under a new scheme, and the government will send a fast-track team to oversee it from autumn. Seventy families have been through the scheme in Wales and a hundred and five in Scotland since March. Other people have started the process to eliminate the imminent threat of repossession.

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According to the latest survey from the Royal Institute of Chartered Surveyors (Rics), house prices fell even further in November.

Rics have said the number of sales are now at their lowest level since 1978. In the three months prior to November, estate agent sales fell to 10.6, from 10.9 just a month ago.

Rics spokesman Jeremy Leaf said: “Many are starting to see the current market as an opportunity to purchase a previously unaffordable property despite the worsening economic picture. But unless people feel relatively confident about their job prospects, they’re unlikely to even try to obtain mortgage finance unless of course trading down or seeking to release capital.

“Vendors still have to accept the inevitable fact that house prices are falling and re-price their property to suit current market conditions.”

Rics are also looking at the little bit of light. Interest in potential buyers has risen again, and is now in the positives for the first time in over a year.

The number of potential buyers has risen, so that the chartered surveyors who have reported having potential buyers not outnumbers the number of surveyors who have seen enquiries fall by 14%.

According to Rics: “the rise in interest reflects both the drop in asking prices and recent cuts in interest rates.”

London has been the worst hit over the past three months, with just seven sales per estate agent on average, followed by Wales and East Anglia.

This is all despite the fact that house prices are still falling. Rics found that 76.5% more of its members had seen house prices still falling instead of rising. This is only a little better than last month’s balance of 81%.

According to the survey: “the main factor that is depressing prices is the large stock of property on estate agents’ books relative to the pool of able buyers rather than any surge in distressed selling.”

The results from this survey were published just a day after Rics predicted that the value of commercial property will drop by 50% from its peak in June last year to its ‘trough’, which could happen as late as 2010.

It is thought that the accelerating fall of rents will cause capital values to fall by 16% in 2009 and 105 IN 2010.

The office sector is likely to be the worst hit, with another 30-35% drop predicted, which will push up the price of the total decline to 60%.

Job cuts in the banking, finance and insurance sectors is having an effect on office spaces. There is less call for warehouse space, and consumers are buying less “big ticket” items.

Senior Economist at Rics, Oliver Gilmartin, claims that: “we are only halfway through the price correction in the commercial property market.”  He added that he hoped the downturn would start to reverse in 2011, with the help of recovering global growth and low interest rates.

Estate Agents face scrutiny after a watchdog revealed it would be watching their competition closely.

It has been four years since the Office of Fair Trading (OFT) last studied the fairness of estate agents work, but a new campaign will be launched in 2009.

Some of the things that will be assessed include internet property prices, consumer protection and competition between different companies.

The OFT chief executive, John Fingleton has said: “Buying or selling a home is something most people do only a few times in their life, but it is usually the biggest transaction they will make.
“We want to ensure that consumers are served well when buying or selling a home and are supported by an effective, competitive and innovative market.”

The industry has gone through some significant changes since the study done four years ago. These changes are not only because of the recent boom and then downturn of the market that we have seen recently, but also changes in several regulations.

The introduction of Home Information Packs and new legislation protecting consumers from unfair practices are a couple of other changes that have occurred since the last mediation.

 The study is expected to be finished by the end of 2009, and will review whether these new rules are adequate enough to protect people using this market.

The review will also look at how easy it is for new estate agents to get into this market, especially online providers, along with the quality and prices charged by all provides.

Concerns about the market were initially raised while the housing prices were at their highest, but in June this year, former head of the OFT, Bryan Carsberg, called for tougher regulations. He said that he thought all estate agents, letting agents and managing agents who handle residential property should be subjected to formal regulations and complete basic qualifications.

National Association of Estate Agents chief executive, Peter Bolton King, has said he welcomes the announcement of the review and also called for appropriate regulations.

He said that: “there is nothing to stop anybody becoming an estate agent and there is a real need for consumers to be aware of this.
“There is clearly a lot of competition between internet retailers, and many people will certainly initially begin their search for property online
“To be safe, consumers should use the professional agents.”

The OFT has the power to ban any agents that break the law when it comes to mis-describing a property, handling a client’s money, not declaring an interest in a property, or being found to have been involved in any other form of dishonesty.

A separate market study from the OFT was published in September, and revealed the market to be competitive, but recommended buyers get more help if they suffer delays moving into their property of find faults.

UK house prices dropped for the 11th month in a row, dropping by 1.7 percent in September, according to Nationwide. The cost of the average home now sits at £161,797, more than £20,000 less than a year ago.

Nationwide said the pace of house price falls had slowed, but warned that the next one or two would be “difficult”. House prices are down year-on-year across the UK, with southern England seeing the worst drop. However, the rate of fall has remained relatively unchanged in the past three months.

Fionnuala Earley, Nationwide’s chief economist said that, “Casting back one year, there have been some astonishing and unpredictable developments in the housing and financial markets”.

But she added hat house prices would not continue to grow in real terms, in the long-term, even though there was a “sharp correction” now.

Exactly how long the correction goes on for and how deep the fall in prices is depends largely on sentiment, as well as an end to the turmoil in the financial markets, she says.

Ms Earley’s analysis comes a short time after the Council of Mortgage Lenders suggested that predicting the short term course of house prices was “futile”.

Nationwide has also released figures showing prices during the third quarter of the year in different areas of the UK.

She said that a distinctive feature of the July to September period was the accelerating fall in house prices in the south of England compared with the north.

Four of the six regions that have double-digit price declines were in the South with East Anglia and the South West showing the biggest annual drops – both 11.4 percent. Northern Ireland has suffered the most dramatic decline across the UK, with house prices there 29.8 percent lower than a year ago, but the price rises had been so fat in recent years, that prices are now back to the same level as the third quarter of 2006.

In Scotland, house prices dropped by 5 percent – bigger than the UK average of 4.6 percent. Wales recorded the smallest fall in prices with a three month fall of 1.9 percent in July to September.

The chancellor, Alistair Darling, Is under renewed pressure to clarify plans for the proposed stamp duty holiday after a poll of estate agents showed that uncertainty was hitting the housing market.

A National Association of Estate Agents survey found that 92 percent believed that the situation had increased consumer concerns, with people who would have bought a home now considering a delay in the hope of avoiding stamp duty later in the year. The NAEA survey polled 1,350 estate agents, and found that 62 percent had been asked for advice on whether to hold off until the pre-budget statement in the autumn,

Mr Darling has refused to rule out a change in stamp duty after it emerged that officials were considering policies including the temporary deferment of the tax for first time buyers.

“I understandably have been taking a plethora of concerned calls from members, some of whom are already starting to feel the impact this comment has had on ready-and-waiting purchasers,” said Peter Bolton King, chief executive of the NAEA, who believes it would be damaging if the Treasury waited to long to explain its plans.

The Treasury, to revive the housing market, is exploring several ideas as part of an “economic recovery plan”. These idea’s include a new ISA, to help first time buyers save for a deposit, and a scheme that helps homeowners who have lost their jobs pay their mortgages.

According to a report in Thursday’s Local Government Chronicle councils in Barnsley, Ports-mouth, Hartlepool, Essex and Kent have stated their interest in becoming mortgage lenders.

The councils are to lobby ministers for permission to lend to homebuyers for the first time in over a decade. The councils want the rules relaxed so they can borrow from banks in a similar way to housing associations. However, they still face the same problems that banks have become reluctant to lend to anyone in recent months.

“Councils would like the idea of being able to offer mortgages in this way but raising the money to actually do it would be the main issue,” said the Local Government Association.