The federal government's help-to-buy scheme for first home buyers is due back in parliament this month after being voted down earlier this year. The idea itself isn't new – several Australian states offer some version of sharing the cost of buying a first home for people priced out of the market. The UK was a pioneer of the scheme. But as Bridget Rollason reports from London, the British model hasn't always worked out.
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00:00So this is the lounge room. As you can see, we've got a lovely view out there of the Thames.
00:09When Wendy Monaghan bought a share of this apartment in South London, one of the world's
00:13most expensive housing markets, she was thrilled.
00:16I can see why you were so excited to move in here.
00:18Oh, we were really excited.
00:20But it wasn't long before she realised she'd made a mistake.
00:24I would hesitate ever to go into any sort of scheme again that is supposed to help first
00:30Wendy bought 30% of the two-bedroom, two-bathroom property from her local housing association
00:36for $550,000 in 2005. But she says the rising cost of living has made ongoing costs like
00:44maintenance and building insurance unaffordable and unattractive.
00:49We can't sell. We can't buy any more. So what are we supposed to do? We're stuck.
00:55So I've lived here for 17 years.
00:57Paul Afshar also has regrets.
01:00You go to sleep at night thinking, God, are the costs going to go up again? Am I going
01:04to have to find that money again? Am I going to have to make savings again? It's not pleasant.
01:09He bought a 25% share of his one-bedroom, one-bathroom home in East London for $386,000
01:17in 2007. But the service charges, or strata fees, for his building have blown out from
01:22$150 Australian a month to $800.
01:26I have to say, my dream of home ownership has now turned into a bit of a nightmare.
01:30Wendy and Paul are among hundreds of thousands of people in the UK who got into the property
01:35market through the Shared Ownership Scheme. The idea was simple. Buyers could purchase
01:40a share of their home with the remainder rented from a housing association, cheaper than renting
01:45on the open market. But after nearly half a century, it's hit the headwinds of the cost
01:50of living crisis.
01:52Home ownership satisfaction in London is around 33%, and outside London, 57%. So that
01:58does suggest that there is a problem.
02:02The UK scheme laid the groundwork for programs in some Australian states, and a new national
02:07plan Labor took to the last election.
02:10An Australian Labor government will help you achieve the great Australian dream of home
02:15ownership.
02:19After Labor's Help to Buy scheme, the government would provide up to 40% of the purchase price
02:24of a new property, or 30% of an existing one, meaning many first home buyers can get into
02:30the market with a deposit of as little as 2%.
02:33But there are some important differences to the UK version.
02:38In the UK, shared ownership is very much governed under a landlord-tenant relationship, so rent
02:44is payable. And under the Australian model, no rent is payable.
02:50But Australian buyers would still need to pay the government back over time, or when
02:54the property is sold. And Australians are also less likely to live in apartment buildings
02:58with high service charges.
03:00But the UK experience could act as a warning about buying into a property where you own
03:06some of the title, but pay all of the costs, in a cost of living crunch.
03:12In principle, the idea of being able to buy a proportion of a property is fantastic, particularly
03:18for first-time buyers, and first-time buyers like I was, who don't have the bank of mum
03:21and dad to rely on. But the practice is really, really different.
03:25Do you think you'd buy again if you could go back in time?
03:28No. No. I wouldn't, and actually I'm quite emotional about that. No.
03:42I wouldn't.