Housing industry experts predict that private housebuilders will begin to take more interest in shared ownership schemes as the market gets more difficult
Housebuilder David Wilson Homes announced last week that it would offer buyers shared equity schemes.
John Storey, the new-build director of mortgage specialist Mortgage Talk, believes other housebuilders will follow suit. He said: “If other housebuilders see sales happening, it is likely. This is a good way to attract the first-time buyer.”
Richard Donnell, head of new homes research at estate agent Savills, said housebuilders had to look at other ways to lure buyers. He said: “Developers have pushed property price levels as far as they can and are now having to revisit pricing strategies to achieve their sales rates”.
David Wilson is selling 80% equity shares in homes, with buyers purchasing the rest in 10 years, or on the sale of the property. The offer is on selected schemes for apartments and smaller homes.
The firm is not the first to market shared-equity housing. Bellway introduced a similar scheme, called Opening Doors, last year. Under this a buyer purchased a 75% stake in a home and paid the rest on resale.
Both housebuilders say that their schemes are aimed at first-time buyers, who have become much less active. They usually account for 50% of mortgage loans but that figure has dropped to 30%.
Developers have pushed property prices as far as they can
Richard Donnell of Savills
n Redrow is set to become the first major housebuilder in the UK to meet John Prescott’s challenge to build homes that can be sold, without subsidy, for £60,000.
The homes will be built at Willans Green in Rugby, Warwickshire, and will meet targets on sustainable development, thermal and sound insulation as well as cost.
Chief executive Paul Pedley said that the homes would cost £55 per ft2 to build, or about half the industry average. They will be built using steel frames and a large proportion of prefabricated parts. It is understood that the housebuilder’s margin will be similar to other projects.
The first batch of homes, which will sell for £54,995, are due for completion in two months.
Redrow announced on Thursday its interim results for the six months ended 31 December 2004. Pre-tax profit rose 22% to 69.1m, and turnover increased 20% to 373.8m.