Keep it in the family

It makes good financial sense for parents to help their children through a first-time buyer scheme
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Issigonis House, W3
From £250,000 (£62,000 for a 25% share): Issigonis House, W3, is on the site of a former car factory (020 8743 5844)
Parents are getting the message that helping their children onto the property ladder is a smart way to invest their money with a double whammy return - when the property sells the parent investors get their money back with an attractive profit, and their children get a home.

And developer discounts and flexible shared-ownership schemes are making it easier for both of them to buy in areas with quick Tube links into central London.

Estate agents report a surge in the number of parents using savings to help their offspring buy. Having to put down a big deposit is a major obstacle for most first-time buyers.

“For parents, it’s a way of making their cash work at a time when savings rates are dismally low and property prices are close to the bottom,” says James Hyman, partner at Cluttons.

Grainger, developer of Hornsey Road Apartments in north London, where 48 homes have been reserved since the launch on 26 March 2009, reports that 40 per cent of buyers have had financial help from their parents, some of whom are funding the entire purchase with cash. “The overwhelming majority of buyers are first-timers in their twenties and thirties,” says Grainger’s Richard Shaw.

Houses and flats to rent in Finsbury Park
Houses and flats for sale in Finsbury Park

Beaufort Park, NW9
From £144,950: Beaufort Park, NW9, has a residents-only gym, car parking and free WiFi. Call 020 8511 8600 or visit
Flats at this scheme cost from £175,000, yet homes below this figure (the temporary stamp duty threshold) are for sale in travel Zones 2 and 3 where there are quick Tube links to the West End and City.

'It's a fantastic way of getting on the ladder'

Michael Campbell, 25, who works as a management consultant in the City, was renting privately in west Kensington and believed he would have to wait until his was in his thirties to get on the property ladder, until he discovered that he could buy a shared-equity apartment for an initial price of £72,500.

This amount was for a 25 per cent stake in a £290,000 split-level at Issigonis House, Acton, where people can part-buy and part-rent before “staircasing” to full ownership.

Michael Campbell
© Mark York
First-time buyer Michael Campbell
With no savings of his own, Michael came up with a businesslike plan: to “borrow” the £72,500 from his parents and pay them back via a “family mortgage” within 10 years. This allows him to comfortably afford the £450 a month rent on the 75 per cent he does not own and put money aside to buy more equity in the future. “My parents were happy to give me the money as a gift but I didn’t want to be seen as a spoiled brat.”

Houses and flats to rent in Acton
Houses and flats for sale in Acton

Issigonis House is built on the site of a car factory and named after the famous engineer who created the Mini. Many of the 129 apartments were designed as live-work homes but developer Shepherd’s Bush Housing Association switched them to fully-fledged residential.

The bonus for buyers is that the double-height apartments are much larger than normal. Mr Campbell’s home is 880sq ft. He uses the mezzanine level as a bed deck, which frees up a room for use as a study.

Hornsey Road Apartments, Islington
From £175,000: Hornsey Road Apartments, Islington. Call 020 7795 4735 or visit
“It’s twice the size of the rented accommodation I was in previously and all in all about £300 a month cheaper. At first, I didn’t like the idea of owning a portion of a property and thought there might be a stigma attached to it. But it’s actually a fantastic way of getting on the ladder. I can live in style in an area I like rather than renting privately and having nothing to show for it.”

The façade of the old factory has been retained, which helps give the scheme a sense of place, while the new-build contemporary-style architecture features lots of glass and timber decking. Communal atriums add to the open feel. Prices from £250,000 (or £62,500 for a 25 per cent share). For information, call 020 8743 5844.

"Duet" flats for sharers

Some developers are revamping the design of flats, aiming to attract low-budget co-buyers and sharers. “Duet” flats have been launched by St George at Parkwest, West Drayton and Beaufort Park, Hendon. Prices start from £159,950.

These homes have two en-suite bedrooms and a single buyer could let out one. Under the Government’s rent-a-room scheme, rental income up to £4,250 a year is tax-free. Call 020 8511 8600.

Houses and flats to rent in Hendon
Houses and flats for sale in Hendon

First-time buyers with a minimum salary of £23,000 qualify for flats priced from £155,000 (£38,750 for a 25 per cent share) at Carew Grove in Streatham. The developer is Notting Hill Home Ownership, an offshoot of the housing association. It claims to be offering added-value interior design by Ilse Crawford, founder of Elle Decoration at budget prices. For more information, call 020 8357 4444.

New build homebuy

Laura Eggleton and Angela Nicolaou, both 24, have been friends since school. While still living with their parents in Surrey, they decided to strike out on their own.

Laura Eggleton and Angela Nicolaou
Laura Eggleton and Angela Nicolaou bought 35 per cent of a £370,000 flat at Amelia House in Kew
Unable to afford to buy a property outright, even as joint purchasers, they took advantage of the Government’s New Build HomeBuy scheme operated by Thames Valley Housing.

This allowed them to buy a two-bedroom, river-view flat at Amelia House, Kew, priced at £370,000. Laura and Angela took out a mortgage for 35 per cent of the value and have the option to increase their share in a year’s time.

They pay rent on the part they do not own, and their total monthly outgoings are about £750 each. “Our buying fees were minimal because we got a special deal from the solicitor and mortgage company recommended by the developer,” says Laura. Angela works for an advertising agency in Soho while Laura works for a brand management company in Teddington.

Deferred purchase price

Parents, too, are choosing to become co-buyers with their children. Elizabeth White, a fine art student, and her father Ian White, 44, a purchasing manager for the NHS, bought a two-bedroom flat at Connection, in Canterbury, where Elizabeth attends the University of Creative Arts.

Connection, Canterbury
Fairview offers a Flying Start deal: 25 per cent of the purchase price is deferred
As a first-time buyer, she qualified for the developer’s Flying Start deal whereby 25 per cent of the purchase price is deferred for up to 10 years on an interest-only basis. She also got £3,000 towards fees.

“We paid £172,000 and took out a mortgage for 75 per cent of value,” says Ian. “Elizabeth will rent out one of the rooms and hopefully the property will be self-financing. If by the time she finishes university the market has picked up we may sell. If not, we will keep it as an investment. We expect Canterbury properties to benefit from the faster train link to London due to start in December 2009,” Ian adds.

By taking advantage of such developer deals and buying at or close to the bottom of the market, first-timers can avoid the spectre of negative equity that is haunting many who bought at the peak two years ago. For more information on Fairview schemes, visit

Houses and flats to rent in Canterbury
Houses and flats for sale in Canterbury

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