Shared ownership is becoming a consideration for many more young Londoners as the inexorable rise in private rents in the capital — up 30 per cent during the last three years — robs first-time buyers of any chance to save a large deposit.
The shared-ownership option provides access to a long-term rental subsidy, plus a secure tenancy, with annual rent rises limited to the retail price index plus 0.5 per cent.
By contrast, private renting remains a landlords' market and is likely to stay that way for some time, with rents forecast to increase by another 20 per cent by 2016, according to reports by Savills and Rightmove.
"Many people fail to realise that shared ownership can be significantly cheaper than renting on the open market, even in some of London's most affluent boroughs," says Lauren Nicholson, head of marketing at Family Mosaic housing association.
For example, in Islington the average one-bedroom private rented flat costs £1,257 a month — while at the Old Timber Yard, close to Archway, Family Mosaic is offering new one-bedroom shared-ownership flats with total monthly outgoings (rent, mortgage and service charge) of £806. This is based on someone buying the minimum 35 per cent share for £72,625 (the full asking price is £207,500). Call 020 7089 1315. Of course, the associated costs are higher than conventional renting — legal and survey fees plus the mortgage deposit, which would total about £12,000.
First things first - get signed up
The best way to register for shared ownership is to sign up to the Government's First Steps initiative (firststepslondon.org). Homes are allocated through two housing association agencies — Metropolitan and London & Quadrant (L&Q). The former covers north, east and west London and the latter covers south of the river. Once registered, you are alerted to developments in your chosen areas.
You can also sign up for "intermediate rent" housing, which is aimed at those who cannot afford to buy but whose income is too high for them to qualify for housing benefit and are therefore reliant on private landlords.
You have to be employed and earning less than £60,000 a year, in the public or private sector. The rents are discounted, typically set at 80 per cent of open-market rates.
In most cases, intermediate rent homes are at new-build developments where shared ownership and private sale flats are available, too. Housing associations also take nominations from local authority waiting lists so it is a good idea to register with your local council, either the one where you live or work, or both.
Intermediate rent two-bedroom flats are in the mix at Archway Heights, an aluminium-clad tower between Holloway and Highgate Village, by Origin housing association. Couples and families have priority. Rents cost from £1,008 a calendar month. Call 0800 068 8990 for more details.
L&Q offers a "rent to buy" option called Up-to-You which provides a discounted rent for five years with the option to buy the property at the end of this period. Call 0844 406 9800 for more details.