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Part owned flats
rich1000
Posts: 257 Forumite
My friend told me I can purchase a house for 25% of its value and the rent the other 75%, later on I can purchase another 25% and so on...
Can you tell me what scheme this called, also do they still do this?
I stay in edinburgh if that might help..
Thanks
Can you tell me what scheme this called, also do they still do this?
I stay in edinburgh if that might help..
Thanks
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Comments
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But your not purchasing for 25% of its value, you purchasing a quarter for 25% of the price. Value and price, imho, have little relationship when it comes to 'shared ownership.
Why not wait till all these BTLers start selling in earnest and just buy outright for half the price.I am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
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Just be careful because, especially with private shared ownership, the rent can come in at mre than the equivalent mortgage repayment would.
Also, on the development I live on, the flats that are now offered shared ownership are the ones that have been on the market forever. There's a flat opposite that has just gone under offer after two and a half years! Not a bargain either when you could get the same flat for £20,000 cheaper after someone else has lived in it. Beware of new build flats!Everything that is supposed to be in heaven is already here on earth.
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They CAN work out cheaper on a monthly basis - mine does.
My one-bed flat, in a shabby but interesting area a stone's throw from Central London, was marketed with a full market value of £145k (which is not bad at all, I haven't seen anything comparable within £15k of this on the open market in anywhere near as convenient a location as I am in). Assuming I could have found a flat to buy outright for that amount, and that somebody would have given me a 90% mortgage for £130.5k (basing the rate and product fee on my actual mortgage), which is about 4.5 times my salary, I would have been looking at monthly payments of about £750 on a 25-year repayment mortgage. On top of this I would have a service charge, say £75 per month, giving total monthly outgoings of £825. A similar property on the rental market would cost me about the same - if I search my postcode area on Rightmove for one-bed flats the cheapest rent is £184 a week (that's £797 a month). My flat, on the other hand, costs me £299 a month mortgage, £218 rent, and £75 service charge - £592 in total. I need somewhere to live, was sick of house-sharing, and frankly when my flat was £200 a month cheaper than the alternatives, it became a very easy decision.
(Edited to say: the share I own in my flat is 40% - and I haven't decided yet whether to leave it that way or to buy further shares in future)
Mine's a newbuild. I absolutely agree with Doozergirl that resale SO properties can work out better value than newbuilds, but in my area (which was my number one choice of area to live in), and indeed in most of my preferred areas, there are simply no resales coming onto the market. There are some in areas that were lower down my list (further out of London) but the difference in cost between those and my newbuild was not significant enough to compensate for ongoing increased travel costs, nor for the fact that I wanted a home for the long term and therefore wanted to make as little compromise as possible on location.
But I still agree with what others have said. I would never have touched shared ownership if the numbers weren't right (I wasn't even looking for my flat when I found it - I just happened to find an ad in Metro for the development and realised after doing my research that this particular place would be ideal for me). I was lucky - most Inner London SO developments are much more expensive and I would certainly have ended up buying or renting further out rather than go anywhere near them.
Operation Get in Shape
MURPHY'S NO MORE PIES CLUB MEMBER #1240 -
Hi quickish reply as haven't read the other threads yet BUT:
We secured one this week...excited is not the word! we have been waiting for rouhgly 6 years believe it or not fo one in the town we want/need We are buying a brand new 2 bed house in a lovley new development with lots of bonuses to it, the house has been valued at £149k and the one we want is going to i think be more (as we get to choose one of 6) we have been offered 40% of it but they say now as we earn enough we can go for 50%, the rent is £150 per month inclusive of buildings insurance. At the moment we pay really cheap rent, houses go for £500+ renting and we in total will be paying around £550 for a home that will be at least secure. Every year we can if we wish buy another 10% and so on...can't wait, there is no way in the world we would get anything near to what we are getting so im chuffed to bits!0 -
Also can i just say that the other bonus to ours is with it being a newbuild is that it is obvioulsy all new, nothing to do when we move, my friend is having a nervous breakdown with all the things in her house as they are all breaking etc, this is another thing with buying in full, the things we can afford wouldn't last a year without major work to them which i havent the time to be bothered with tbh..good luck with what you do!0
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With shared ownerships, you simply have to look into each project on its own terms. I am currently purchasing a two-bed property (new build) in London. I´m purchasing 25% of the purchase price (235k) and renting the rest from a large HA which will remain nameless. I personally would be wary of going into a shared ownership deal with a private company. The property is not in central london, (zone 4), but is in a borough where prices have always been traditionally high and have pretty good schools. There is absolutely no way I could have bought a property in this area (which is close to my elderly parents) using the traditional method home buying.
The property comes carpeted and with a cooker, which right now is a god send. Although the flat is painted in magnolia (ugh), it will do for now! I don´t have to do anything to it. It´s ready to move in.
I can´t speak for the rest of the country, but in London, many people simply would not be able to buy a home without using the shared owneship method. Do your research before dismissing completely.I've lost over 100lbs in two years, I can be debt free too.0 -
sandanista wrote: »With shared ownerships, you simply have to look into each project on its own terms. I am currently purchasing a two-bed property (new build) in London. I´m purchasing 25% of the purchase price (235k) and renting the rest from a large HA which will remain nameless. I personally would be wary of going into a shared ownership deal with a private company. The property is not in central london, (zone 4), but is in a borough where prices have always been traditionally high and have pretty good schools. There is absolutely no way I could have bought a property in this area (which is close to my elderly parents) using the traditional method home buying.
The property comes carpeted and with a cooker, which right now is a god send. Although the flat is painted in magnolia (ugh), it will do for now! I don´t have to do anything to it. It´s ready to move in.
I can´t speak for the rest of the country, but in London, many people simply would not be able to buy a home without using the shared owneship method. Do your research before dismissing completely.
My partner and I are looking into doing this as well....
It would take years to save for a healthy deposit and in london we would only be abe to get a tiny 1 bed flat on our wages...!0 -
Bargain_Rzl wrote: »They CAN work out cheaper on a monthly basis - mine does.
My one-bed flat, in a shabby but interesting area a stone's throw from Central London, was marketed with a full market value of £145k (which is not bad at all, I haven't seen anything comparable within £15k of this on the open market in anywhere near as convenient a location as I am in). Assuming I could have found a flat to buy outright for that amount, and that somebody would have given me a 90% mortgage for £130.5k (basing the rate and product fee on my actual mortgage), which is about 4.5 times my salary, I would have been looking at monthly payments of about £750 on a 25-year repayment mortgage. On top of this I would have a service charge, say £75 per month, giving total monthly outgoings of £825. A similar property on the rental market would cost me about the same - if I search my postcode area on Rightmove for one-bed flats the cheapest rent is £184 a week (that's £797 a month). My flat, on the other hand, costs me £299 a month mortgage, £218 rent, and £75 service charge - £592 in total. I need somewhere to live, was sick of house-sharing, and frankly when my flat was £200 a month cheaper than the alternatives, it became a very easy decision.
(Edited to say: the share I own in my flat is 40% - and I haven't decided yet whether to leave it that way or to buy further shares in future)
Mine's a newbuild. I absolutely agree with Doozergirl that resale SO properties can work out better value than newbuilds, but in my area (which was my number one choice of area to live in), and indeed in most of my preferred areas, there are simply no resales coming onto the market. There are some in areas that were lower down my list (further out of London) but the difference in cost between those and my newbuild was not significant enough to compensate for ongoing increased travel costs, nor for the fact that I wanted a home for the long term and therefore wanted to make as little compromise as possible on location.
But I still agree with what others have said. I would never have touched shared ownership if the numbers weren't right (I wasn't even looking for my flat when I found it - I just happened to find an ad in Metro for the development and realised after doing my research that this particular place would be ideal for me). I was lucky - most Inner London SO developments are much more expensive and I would certainly have ended up buying or renting further out rather than go anywhere near them.
What scheme did you find this through as I live in Zone 4 as well???0
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