Affordable housing provides a gateway into the housing market for many first-time buyers

Affordable housing provides a gateway into the housing market for many first-time buyers

Halifax has reviewed the low cost home ownership (LCHO) sector and affordable housing schemes, looking at shared ownerships, shared equity, resale price covenants and other LCHO arrangements.  As Government sponsored schemes aim to help potential buyers to access the housing market by reducing the costs of buying the property, Halifax has looked at the typical profile of some buying under affordable housing schemes.
The average price paid for properties purchased under shared ownership, shared equity and other LCHP schemes is 12% lower than the average for all houses, at £161,839.  
When looking at regions, the biggest difference between the average price paid under LCHP schemes and buying without help is in London.  Here the average price paid for affordable housing is nearly one fifth lower.  The average price of a LCHP house in London is £243,841, compared to £298,972 for a house purchased without assistance.    
Houses purchased under affordable housing schemes are smaller on average than a typical property.  The average LCHP house has 4.4 rooms not including kitchens and bathrooms, compared with the average of 5.2 for all houses.  Nearly 3 in 10 homes bought under affordable housing schemes are flats, nearly double the proportion of all home sales accounted for by flats.  
79% of properties purchased in affordable housing schemes are new build properties.  
16% of all affordable housing transactions in 2011 were in the South East.  This was followed by 15% in Scotland, 11% in the North West, 10% in the South West and 5% in London.  
More than two-thirds of those buying a home using an affordable housing scheme are first-time buyers.  The average age of a buyer is 32 years.  49% of those buying a LCHP home are aged 20 to 29 years.  This compares with only 25% in the same age band when looking at all home purchases.  
Martin Ellis, housing economist at Halifax, commented:
"Affordable home ownership schemes offer a cheaper alternative to buying a home but with the flexibility of allowing the occupiers to increase their share over time. This has particularly been true for first-time buyers who account for the largest share of the market. Of all the various low cost home purchase schemes, those under the builders’ own shared equity schemes and FirstBuy umbrella have proved to be the most popular.
"Whilst shared equity and other affordable housing schemes have historically performed strongly, new schemes such as the government’s New Buy initiative will also play a role in meeting demand and helping to support first-time buyers."
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