The Mortgage Clinic: 'Should I go for a housing association scheme?'

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'I can't afford to buy a home outright, but as a teacher, I'm eligible for key-worker shared-ownership schemes. I'm hoping that my salary will rise over the next few years, so that I'll be able to buy the flat outright over time. But am I better off opting for a housing association scheme or something that's offered by the private sector?' AL, by email

In the past few years, the number of schemes open to key workers who want to buy a home has increased significantly. It is no longer the case that the only way to buy a home through shared ownership is through a housing association or other social landlord.

As a teacher, you are likely to qualify for the Government's Key Worker Living programme (for people in London and the South-east and the east of England), as well as for one of a number of "home buy" schemes.

These fall into Social HomeBuy (for council or housing association schemes), Open Market HomeBuy and New Build HomeBuy. Details of the different schemes can be found on the Directgov website (

These schemes allow you to increase the percentage of the property that you own over time, known as "staircasing", as well as to share in any increase in house prices. But there are downsides, too.

"You will be paying rent for part of the property, you have a more limited choice of property and, depending on where you are, you may have to wait. In addition there are always the complexities of your rights and responsibilities – where yours end and your housing association's start," says Helen Adams, director of the first time buyers' website

And in some ways, the private sector shared ownership schemes are even more restrictive. Although you are not tied to a housing association or council property, you still have to qualify for the HomeBuy scheme; the rules vary from area to area.

You will own a percentage of the property, but so will both a HomeBuy agent, who administers the Government support, and a commercial lender. Although the choice of properties in a private scheme is wider – under the Open Market scheme you choose the house, then arrange the funding – the choice of lenders is more limited.

Many, although not all, mortgage companies will lend on housing association shared-ownership properties. The private sector HomeBuy schemes use specific lenders, so the deals on offer might not be as good. On the upside, however, you do not have to have a deposit.

It is, of course, virtually impossible to predict which type of property would be the better long-term option for you. A housing association (or ex-housing association) property might put off some buyers when you come to sell on, but there are also some excellent and innovative social housing projects out there, especially for "greener" homes. And, although social housing stock might not increase in value as quickly, it is usually cheaper to start with.

But if capital appreciation is important to you, then you should look at the private sector. At FirstRungNow, Adams suggests looking at other options for first-time buyers, including longer mortgage terms, guarantor mortgages or even buying jointly with a relative. This way, you can choose the property and the mortgage on the open market, and benefit from outright ownership of your home.