There is an exasperating reality for first-time buyers struggling to get on to the property ladder in 2010: first homes have rarely been so affordable, yet, for many, owning one can seem less achievable than ever.
Interest rates have been slashed and prices remain well below the peak of 2007. But the huge deposits demanded by lenders make buying impossible for those who cannot rely on their parents for financial help.
Typically, buyers need to put down 15 to 25 per cent, which in London equates to a whopping £35,000 to £60,000 - too much for young graduates with student loans to pay off.
The average property price is £228,628, according to Hometrack. Hence the appeal of shared ownership, where the upfront costs are considerably lower. However, research by Moneysupermarket.com shows the mortgage situation is improving. Since last December, the number of 85 per cent loan-to-value deals available has jumped 22 per cent.
Nationwide now offers 90 per cent LTV mortgages but applies tough credit-scoring criteria. Lenders normally stick to three times the joint salary.
For many buyers, government-backed affordable schemes are their only means of buying before prices start rising again as the market recovers. To keep sales momentum going, private developers are reintroducing incentives such as stamp duty refunds and providing interest-free loans, repaid on resale.
Fairview has announced a “price freeze” and is paying buyers’ stamp duty at Pembroke Park, Crawley, and The Mill, South Darenth, and is also offering £2,000 cash “bonuses”. Prices start at £134,950 for one-bedroom apartments. Call 01293 612121.
Dream Start and Head Start are Barratt initiatives. With the former, buyers can move into a new home for 75 per cent of the price. The developer pays the remaining 25 per cent as an interest-free loan.
This is not shared ownership. Buyers own 100 per cent of the property but undertake to pay back the loan within 10 years, or on resale if earlier. Some lenders accept the 25 per cent provided by the developer as the deposit.
Head Start is aimed at those who have a five per cent deposit. Barratt offers a 15 per cent interest-only loan, repayable on the same basis as above. Both deals are available at several London developments, including New South Quarter in Croydon, where prices start at £174,995. Call 020 8688 0688.
At Wembley City, a regeneration zone around the national stadium, shared- ownership buyers can live rent-free for six months. This deal is offered by Family Mosaic housing association at a block called Quadrant Court.
Buying 25 per cent of a one-bedroom apartment costs from £47,000. Normally rent is payable at 2.75 per cent of the unpurchased equity. The rent waiver means savings of £2,500 over the six-month period. Call 020 7089 1315.
At Enterprise Place, in Woking town centre, developer United House says it has shunned sweeteners for buyers and is focusing on value for money. Flats are “priced to sell” - from £115,000 for a studio. One-bedroom flats start at £165,000. Call 01483 729925. Show apartments are open for viewing.
Management accountant James Rawson, 26, knew he would have extra bargaining power with a 10 per cent deposit, which he managed to save while living with his parents in Twickenham.
"Prices are bound to rise sooner or later, so I thought I'd better get on the housing ladder quickly," he says.
James wanted to stay in south-west London and bought a one-bedroom flat at Harmony in Isleworth, managing to negotiate a discount on the £190,000 asking price and getting a free car parking space, worth another £5,000. He paid £180,500.
Prices at Harmony will start at £197,950. Call Willmott Dixon on 020 8568 6057. Apartments at the development will soon be available under the Government's New Build HomeBuy scheme. Key workers and those earning less than £60,000 a year qualify.
The flats will be allocated via Notting Hill Housing. For information, call 020 8357 4444.