Low and middle-income Londoners need to earn £50k to get in on shared ownership scheme?

14 April 2014

green housesRemember the good old days when things other than creosote did exactly what it said on the tin? The latest Mayor of London scheme to help the little people on to the property ladder is under fire from critics who claim that the very people the scheme has been set up to benefit are being excluding from taking part.

The London scheme is run by First Steps and offers those unable to afford a whole property in the capital (which is pretty much everyone who isn’t a Russian oligarch) the chance to buy a slice of a property, to (potentially) reduce their monthly outgoings and to benefit from any increase in property values. However, in practice, it seems that many of the properties are still dangling just out of reach of the average nurse, teacher or policeman the scheme was designed to look out for.

Take the case of Joanne Pearson. The 36 year old nurse profiled in the Guardian lives Southwark, south London, and earns around £26,500. She had hoped to buy a 25% share in a one-bed flat but has been disappointed by the First Steps offering: "Many of the one-bedroom flats advertised on the website require an income of above £50,000 a year, while for others you must earn above £33,000," she says. "I wonder how many nurses, teachers or other workers on low or modest incomes actually earn £50,000?" Under current NHS bandings nurses earn between £21,388 and £34,530, although there is a London weighting added as appropriate.

Ms Pearson also claims that the mortgage payments would be cheaper than the £1,000 rent she is currently paying. She is not a happy bunny. "As a person who provides an essential public service, I feel disheartened and let down that I'm locked out of this scheme.” A report by Green party member of the London Assembly, Darren Johnson, found that the average minimum income required (where this was stated by housing associations) through First Steps was £38,452.

A spokesperson for the Mayor of London said that, of the 50,000 low and middle-income Londoners buying their own home through First Steps, “some” are on salaries of around £25,000 a year, with the average household income of those accessing the scheme at £33,000. However, with “affordable” properties on the site reaching as much as £712,000 (Blandford Street, Marylebone), and requiring an income of £128,000, perhaps the mayor’s office is just a little out of touch…

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