Shared ownership/equity is a scam.

HappyMJ wrote: »

Shared ownership is not a scam . . . . . . . Can this be stickied please?

Shared ownership reduces risks. Allows a tenant/owner to buy a larger property than they could otherwise afford or in an area they can't afford.

If the scheme didn't exist, they would have to lower the price to a level that people could afford or they wouldn't be able to sell them.

It allows a low income earner with cash to spend it on a deposit and claim Housing Benefit on the rented portion. They wouldn't have got any benefit at all if they had over £16,000 in cash.

They would be able to claim Housing Benefit on a rented flat anyway and if someone had 16k, they wouldn't need Housing Benefit surely.

If something is too expensive to buy without having to rely on some daft scheme to buy it then you just dont buy it.

and_another_thing... wrote: »

Properties in some areas in London and the south east, for example, are likely to always remain out of reach of the average wage earner. If shared equity schemes (I'm talking about the ones not just restricted to new builds) didn't exist then there would be more and more pockets of wealthy people separated from the rest of the country. Everyone else would live in the 'cheaper' areas.

Complete and utter rubbish. These schemes are simply designed to keep prices inflated, the people who fall for them are mugs and will face negative equity if not suffering it from now. Strange before these schemes house prices were affordable, the more and more of these schemes were implemented the more the house price bubble got bigger.

I just wish the government wasted another £50millon on such a dodgy scheme that will trap 10,000 new financially illiterate ftbs in this scheme. The only people it benefits are the building companies and their shareholders.



and another thing Would you like to give us the rough area in South West London you live, the amount paid and the equity loan so we can check this to the local rents?

Our shared ownership dream home turned into a disaster

Mira Bar-Hillel, Property Correspondent 8 Aug 2008

A couple who got on the property ladder through a shared ownership scheme have dismissed the concept as a disaster.

Special needs teacher Andrew Howard, 29, and his partner purchased a 40 per cent share of a new flat in Leytonstone from Newlon Housing Trust less than two years ago.

When he was offered a new job in Norfolk he thought it would be a straightforward process to sell the property and relocate.

But their experience of ownership and trying to sell has left the couple, who have a two-year-old daughter, in despair.

Mr Howard paid £79,000 for his share of the £195,000 two-bedroom flat, which carried a monthly rent and service charge of £347 until it shot up to £433 in April.

The couple's problems began shortly after they moved in. They included:
• Rubbish not collected for five weeks because of poor access to the bin sheds.
• A lift out of service for 11 days.
• A broken front door which had no handle and remained unsecured for nearly two weeks.

Mr Howard said: "We could not do any repairs ourselves because we were mostly tenants. When we complained, Newlon were invariably rude and unhelpful and treated us as though we were the problem."

Things became much worse when they asked about selling their share of the flat, thinking the trust would buy it.

"When we suggested this, Newlon refused point blank, claiming they had no money to do so," said Mr Howard.

He made a formal application to sell in April but discovered that under the terms of the lease he had to give the trust first option and up to eight weeks to resell the property, for which it would claim an agent's fee of 0.75 per cent.

Mr Howard had the flat cleaned and painted ready for viewings but heard nothing from Newlon for two weeks.

The couple were then contacted by valuers, to whom they were asked to pay £300 in addition to paying Newlon's £400 legal costs and for a home information pack.

By early June the trust had still not put the flat on the market and told Mr Howard the eight-week period when it had sole agency rights would only begin when it appeared on a website marketing shared ownership homes. Newlon also said it had a list of interested buyers but these never materialised, claimed Mr Howard. He added: "In July, after many fraught phone conversations, Newlon finally allowed us to use our own estate agents, who at least tried to market the flat properly. "But by then the market had gone flat and the holiday season had started."

The final blow came this week, when Newlon assistant director Sunita Parbhaka told Mr Howard she wanted to contact their mortgage lenders, Nationwide, to "find a way to help you".

According to Mr Howard, she said she wanted to discuss repossession of the flat even though the couple had never been in arrears. Mr Howard said: "I am appalled a charity which is meant to help people like us would want to force us into repossession and extract money from us at every turn."

He now considers shared ownership, the flagship of Labour and Tory affordable housing policies, a "SCAM". He said: "With shared ownership you have 100 per cent liability and zero per cent rights."
A Newlon spokesman said it had tried to help the couple. He added: "We have not failed in our obligations to the owners of the flat, nor have we threatened them with repossession. We sympathise with people finding it hard to sell their homes in the current housing market."

HOW THE HOUSING SCHEME WORKS
• Shared ownership was devised as a way of getting people with relatively limited equity on to the housing ladder.
• The occupant buys a percentage of a property - it must be a minimum of 25 per cent.
• The housing association or trust continues to own the rest of the property and the occupant pays rent to the association.
• The occupant also pays service charges for maintenance.
• The resident is not allowed to carry out maintenance themselves - the housing association is responsible for doing it.

http://www.thisislondon.co.uk/standard/article-23529109-our-shared-ownership-dream-home-turned-into-a-disaster.do