Can't afford to buy? Oh, yes you can

Shared-ownership schemes provide a way onto the property ladder for those who couldn't otherwise afford to buy, says Christopher Browne

You've just left college with a student loan, a new job and a partner to share your hopes and ambitions with. It's time to nest and invest. You check out the local area and scan the ads but, wherever you look, the property prices are too high – and renting's equally costly. But there's another option – you can link up with a housing association to make that first move.

Primary-school teacher James Dallas stumbled on the idea at a school fair. "I'd done my fair share of renting and wanted to move on, but whenever I visited an estate agency and told them what I could afford I was laughed out of the door," he says. But James picked up a brochure from London's Notting Hill Housing Group and applied for a scheme known as Key Homebuy.

The 26-year-old then started looking at studios and flats. After three weeks, he found a purpose-built, one-bedroom flat near his school in Teddington, Middlesex, and made an offer. Eight weeks later he moved in. "The flat was advertised at £120,000, so I made an offer of £117,000. The housing association lent me the £30,000 deposit. I took out a 30-year mortgage and my parents paid the stamp duty and moving-in fees. The loan is interest-free and doesn't have to be paid off until I sell the flat," says James.

Key Homebuy is a Government-subsidised scheme for London-based public-service workers, who can borrow up to 30 per cent (with a limit of £35,000) of the value of a new home. (There is also a national version called Homebuy.)

A second option is shared ownership. Singles, couples and families can pay a percentage of a property's price and rent the rest – increasing their share as and when they can afford it. Howard and Amanda Fertleman and their three children were living in such cramped conditions that Howard wrote off to the local council to see if they had anything to offer. The council put them in touch with an organisation called Metropolitan Home Ownership (MHO) who came up with a winner. "Not only did it have four bedrooms and a garden, but it was £100 per month cheaper than the one we were living in," says 37-year-old Howard. So the couple took out a 50 per centx mortgage on the £150,000 home, and paid rent to MHO for the other half. "We could not have got a house like this in London in any other way," says Howard, who is training to be a surveyor. "Our combined mortgage and rent is £750 a month and we can do improvements to our home whenever we feel like it. The kids are much happier too, with a garden to play in."

There's a third way you can nest and invest if you're practical and don't mind a bit of hard labour: you can help build your first home by joining a self-build shared-ownership scheme. Thirty-six-year-old carpenter/ builder Trevor Saunders, a single parent, was keen to move from the east London tower block where he was renting with his eight-year-old daughter Bianca. He came across a shared-ownership scheme offered by Boleyn and Forest Housing Association. The project, in London's Upton Park, was to transform a burnt-out former council block into eight modern apartments.

Trevor and seven other self-builders signed up and carried out all the electrical work, flooring, woodwork, decorating, tiling and kitchen-fitting. Trevor's hard work paid off in two ways – it earned him a new home, plus a 25 per cent equity in it. He then obtained a mortgage for an extra 25 per cent, paying rent to the housing association for the rest – with an option to buy further chunks when he can afford it. Two months later Trevor and Bianca moved in. "It may seem a sweaty way to climb on to the property ladder, but all the hard work has paid off," he says.

Thoughtful parents can also help to make that first move. Gary Ayling and Kerry Socha from Moulton near Northampton were about to have their first child and funds were tight. The pair, who work for a DIY superstore, had neither the salary nor deposit to buy a house in the area, so they joined a local shared-ownership scheme. And waited. Ten months later, the couple, who by now had a baby son, still hadn't heard anything. As they had already found a two-bedroomed terraced house they liked, Kerry's father agreed to give them enough cash for their deposit and some renovation work. The couple then approached Northern Rock building society who signed them up for their first-time buyers' "Together" loan (which pays out up to 125 per cent of a home's value). They signed up for a 95 per cent loan on the £50,000 house and borrowed another £10,000 to help refurbish it.

Further information on Key Homebuy from 0800-015 3358; Boleyn & Forest Housing Association 020-8472 2233; Northern Rock BS 0845-604 0160.