Mortgage guide

The scheme has been particularly popular in London but has also been adapted to stop villages becoming unnaffordable for local residents.

Before you are able to register for shared ownership your ability to afford a mortgage is assessed. Housing associations set minimum incomes for the scheme, often between £15,000 and £20,000, to ensure you can keep up repayments and cover other costs.

Housing associations also run a new scheme called Homebuy, but it is only open to existing local authority or housing association tenants, or those with priority on a waiting list.

Under the scheme, you find a house you want to buy and borrow 75 per cent of the purchase price from a lender and 25 per cent from a housing association. There are no repayments on the housing association loan.

Shared ownership has been a lifeline for some but there is a shortage of properties in areas such as the South East and waiting lists can extend to three years.

The situation in the South East has become so serious that it is exacerbating labour shortages in the public sector, according to the National Housing Federation. Modestly paid workers such as teachers and nurses cannot afford to live in London.

One housing association, Peabody Unite, has launched a scheme that provides cheap rented accommodation in the capital for nurses who cannot afford to buy homes.

Tricia Crawford, 34, a junior sister at the Royal London Hospital in East London, pays £325 a month for a self-contained flat in an area where private rents can be as high as £300 a week.

The lack of affordable accommodation in the South East is in contrast to the situation in the North, where there are surpluses of local authority and housing association homes, albeit with many having fallen into disrepair.

For a list of housing associations in your area, contact your local authority.

Shelterline is a housing advice helpline run by the charity Shelter: Phone 0808-800 4444.

Homes is a voluntary organisation providing information on shared ownership: Call 0171-963 0200.

How squatters cash in

The issue of squatters' rights to property they have not paid for always raises the temperature of people struggling to make their mortgage repayments.

Recently there has been a spate of cases where councils in London have forgotten about houses they own and squatters have won ownership rights.

In one celebrated case, a court gave a squatter legal ownership of a £200,000 home in Brixton, South London, after Lambeth council forgot that it owned it.

The squatter said he had been living there for 16 years. The legal minimum before ownership can be handed over is 12 years. Shelter, the housing charity, says that if you have lived in a property for 12 years with no contact from or acknowledgement by the landlord - a private one or a council - you can claim full ownership.

It is not illegal for squatters to move into a property which appears to be permanently empty, but it is illegal to cause damage to gain entry.

Once in, squatters can make it home from home. They can change the locks, pay to have the fuel and water reconnected and refuse entry to unwanted visitors. However, if the owner of the property should be in contact within 12 years, he has the right to evict.

Victoria's step on to housing ladder

Victoria Bond, 34, used shared ownership to beat soaring prices and buy her London flat.

Victoria, who earns around £17,000 in the City, says: "Four years ago, I was renting property near Hampstead in London and I decided I wanted to own my own property.

"There was no way I could afford to buy outright because house prices in this area of London are so high, so I registered with my local housing association for shared ownership."

She was on the waiting list for two years and moved into a new one-bedroom flat valued at £75,000 two years ago. She took out a loan to buy 50 per cent of the flat and makes mortgage repayments of £250 a month, as well as £187-a-month rent to her housing association.

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