Main site > MoneySavingExpert.com Forums > Essential Money > House Buying, Renting & Selling > Shared Ownership, is it a good idea? (Page 1)

IMPORTANT! This is MoneySavingExpert's open forum - anyone can post

Please exercise caution & report any spam, illegal, offensive, racist, libellous post to forumteam@moneysavingexpert.com

  • Be nice to all MoneySavers
  • All the best tips go in the MoneySavingExpert weekly email

    Plus all the new guides, deals & loopholes

  • No spam/referral links
or Login with Facebook
Shared Ownership, is it a good idea?
Reply
Views: 12,706
Thread Tools Search this Thread Display Modes
# 1
mikemessa
Old 11-06-2012, 3:05 PM
MoneySaving Convert
 
Join Date: Jun 2010
Location: Essex
Posts: 26
Default Shared Ownership, is it a good idea?

Hi there, I am currently looking to purchase my first property but have limited funds. I was wondering if shared ownership is a good idea or is it not worth pursuing. If I got a normal mortgage the 10% deposit would leave me with no money. Is there anything our there where a 5% deposit is satisfactory?

Thanks
mikemessa is offline
Reply With Quote Report Post
# 2
Lizling
Old 11-06-2012, 3:31 PM
MoneySaving Stalwart
 
Join Date: Feb 2011
Location: London
Posts: 747
Default

If it's the deposit that's the problem, would saving up the 10% be possible or are you paying rent that's a lot higher than the rent+mortgage repayments would be under shared ownership?

I think shared ownership has its place when the repayments would be very affordable to you, but it would be difficult to get a big enough mortgage on your own. Beware though, from what I've seen, most shared ownership homes are massively overpriced, especially the new builds.

5% deposits are enough for a few lenders now if you've got an excellent credit history or in a few cases if you have a guarantor(e.g. Lloyds Lend a Hand mortgages).

Just sent off for details on a shared ownership flat myself, so looking forward to reading everyone's responses.
Saving for deposit: Finished!
House buying: Finished!
Next task: Lots and lots of DIY
Lizling is offline
Reply With Quote Report Post
The Following User Says Thank You to Lizling For This Useful Post: Show me >>
# 3
mikemessa
Old 12-06-2012, 9:26 AM
MoneySaving Convert
 
Join Date: Jun 2010
Location: Essex
Posts: 26
Default

Hi Lizling, thanks for your feedback. The thing is I have the deposit money (just about) however thats all I have. So if I do get a normal mortgage I am left with zero in my bank account. Maybe I should wait a bit longer before I commit however there are some new builds near my area that I am really interested in and I am concerned it may all be sold by the time I save more money. Thanks
mikemessa is offline
Reply With Quote Report Post
# 4
The-Joker
Old 12-06-2012, 12:09 PM
MoneySaving Stalwart
 
Join Date: Dec 2011
Location: Gotham city
Posts: 275
Default

Quote:
Originally Posted by mikemessa View Post
Hi there, I am currently looking to purchase my first property but have limited funds. I was wondering if shared ownership is a good idea or is it not worth pursuing. If I got a normal mortgage the 10% deposit would leave me with no money. Is there anything our there where a 5% deposit is satisfactory?

Thanks

Shared ownershipt is only a good idea if its with someone you know and trust, like family member. All sorts of problems like when something needs moneyspent on it, you have to agree on if to do a cheap quick job or spend more on better building materials or whatever.

What about when the time comes you need a new kitchen or bathroom, very hard to agree.
The thing about chaos is, it's fair.
The-Joker is offline
Reply With Quote Report Post
The Following 2 Users Say Thank You to The-Joker For This Useful Post: Show me >>
# 5
saayinla
Old 12-06-2012, 12:15 PM
MoneySaving Convert
 
Join Date: Aug 2007
Posts: 109
Default

Quote:
Originally Posted by The-Joker View Post
Shared ownershipt is only a good idea if its with someone you know and trust, like family member. All sorts of problems like when something needs moneyspent on it, you have to agree on if to do a cheap quick job or spend more on better building materials or whatever.

What about when the time comes you need a new kitchen or bathroom, very hard to agree.

I think the OP is referring to Part buy part rent Scheme, not a joint ownership thing.
saayinla is offline
Reply With Quote Report Post
The Following User Says Thank You to saayinla For This Useful Post: Show me >>
# 6
mikemessa
Old 12-06-2012, 2:45 PM
MoneySaving Convert
 
Join Date: Jun 2010
Location: Essex
Posts: 26
Default

Hi guys, yes I meant part rent, part purchase scheme. Thanks
mikemessa is offline
Reply With Quote Report Post
# 7
shinydiscoballs
Old 12-06-2012, 3:12 PM
MoneySaving Convert
 
Join Date: Oct 2008
Posts: 26
Default

I bought a shared ownership property and I love it. I bought a resale property because they are cheaper than the new builds (Guess its like buying a new car instead of a used one) and I checked how much the flats were selling for in the area and made an offer based on that. I got the flat for 5000 less than asking price.

I now live in a two bedroom flat that I can grow in to and would never have been able to afford on the open market. The service charge and the rent equal the same as the private rent in the property but at least I'm contributing to something!

Don't underestimate how much you will need, they say 5% deposit but its unlikely that you will find a mortgage company that will accept no less than 10% deposit plus you need another 2.5k for the legal bit. I got in touch with a financial advisor as there aren't many mortgage lenders for shared ownership.
shinydiscoballs is offline
Reply With Quote Report Post
The Following 2 Users Say Thank You to shinydiscoballs For This Useful Post: Show me >>
# 8
DizzyGherkin
Old 12-06-2012, 9:00 PM
MoneySaving Newbie
 
Join Date: May 2007
Posts: 14
Default

It's a great move for first time buyers - my wife and myself would never have been able to get on the ladder otherwise.
In the long run, it probably costs a bit more, however with deposits required these days, at least you can get on the ladder quicker.

We purchased a brand new flat it it's been amazing. We are now looking to move onto the 2nd step of the ladder and get ourselves a bigger place fully owned by us!!

Back when we purchased our place Shared Ownership was relatively new and not a lot of lenders, or solicitors seemed to know to much about it however nowadays its a lot more common and I would expect the process to be a lot easier.

Its certainly worth considering...
DizzyGherkin is offline
Reply With Quote Report Post
The Following User Says Thank You to DizzyGherkin For This Useful Post: Show me >>
# 9
jellybabes
Old 12-06-2012, 9:45 PM
MoneySaving Convert
 
Join Date: Apr 2008
Posts: 127
Default

I agree with both the above post, we are in a shared ownership and would never have been able to afford a whole house, we have the option to buy the other half of the house if and when we want to.
It s has been a real help getting us on the property ladder.
jellybabes is offline
Reply With Quote Report Post
The Following User Says Thank You to jellybabes For This Useful Post: Show me >>
# 10
mikemessa
Old 13-06-2012, 9:14 AM
MoneySaving Convert
 
Join Date: Jun 2010
Location: Essex
Posts: 26
Default

Thanks guys for all your feedback, its nice to hear there are happy customers as oppose to negative feedback. I hear that when you want to sell the place its more difficult. Has anyone had bad experiences with the selling part?
mikemessa is offline
Reply With Quote Report Post
# 11
jozbo
Old 13-06-2012, 9:48 AM
MoneySaving Stalwart
 
Join Date: Jul 2010
Posts: 246
Default

a colleague of mine is having real difficulty selling hers on - i think it's been on the market a year and she's getting fed up.
i would think that as long as the place is big enough and in an area you're not only temporarily tied to it should be a good bet.
jozbo is offline
Reply With Quote Report Post
The Following User Says Thank You to jozbo For This Useful Post: Show me >>
# 12
lazer
Old 13-06-2012, 10:06 AM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Mar 2009
Posts: 2,880
Default

Quote:
Originally Posted by mikemessa View Post
Hi Lizling, thanks for your feedback. The thing is I have the deposit money (just about) however thats all I have. So if I do get a normal mortgage I am left with zero in my bank account. Maybe I should wait a bit longer before I commit however there are some new builds near my area that I am really interested in and I am concerned it may all be sold by the time I save more money. Thanks
I was planning on doing this, but then got a few extra quid and even managed to get the deposit up to 15%.
But TBH, the only other fees you actually need are the legal fees - mine were 800, and possibly valuation fees, mortgage fees etc - although it can be possible to add these to the mortgage.

Depending on where you are currently living (if its with parents), moving in can be done as and when its suits you (without Removal vans!), same with decorating, buying furniture etc. As long as you have a bed and a kettle and something to cook on, you'll survive in the short term!

Also remember that it will take you probably around 3 - 6 months from when you start looking, to find the perfect house, put an offer in and complete, so therefore depending on how much you can save a month you will have saved more by the time you complete.

As yu have the 10% deposit, i would not go for shared ownership, and instead go for fully owned, its much better peace of mind and easier to sell, better choice of mortgages.

There is also some 95% mortgages out there - but the rates are generally high and everything else needs to be perfect.

Alternatively check out properties with vendor gifted deposits (although this will restrict your mortgage availabilty too)

My advice - go chat to a broker
Weight loss challenge, lose 15lb in 6 weeks before Christmas.
lazer is offline
Reply With Quote Report Post
The Following User Says Thank You to lazer For This Useful Post: Show me >>
# 13
DizzyGherkin
Old 13-06-2012, 9:06 PM
MoneySaving Newbie
 
Join Date: May 2007
Posts: 14
Default

Regarding resale, we've just sold ours. Initially it is a bit of a palava, but its worked out well in the end. Usually you'll need to offer it back to the housing assoc first and they have a certain period to sell.

We had no interest via the housing assoc so after 3 weeks they released us from the agreement. We were then free to sell via an estate agent on open market. They valued the property a lot higher and we had an asking price offer within a week.

You're best though to check with the individual housing assoc as they may have different rules or processes on resale.
DizzyGherkin is offline
Reply With Quote Report Post
# 14
vivster
Old 13-06-2012, 9:30 PM
MoneySaving Convert
 
Join Date: Jan 2012
Posts: 52
Default

I sold mine last year.

It was a palaver getting it on the market as I had to jump through the HA's hoops. I first had to pay to get it valued by a surveyor, and pay for it. Then it took ages for them to take the photos and get it online. I had to let the HA try to sell it for 12 weeks, before they would let me try and sell it privately.

But I found a buyer a week after going on the market with the HA. I got a bit lucky, as the buyer was a good friend of my next-door-neighbour, so it wasn't really down to the HA's marketing efforts in the end, but c'est la vie. I was just pleased to have a buyer.

The HA took 1% plus VAT from the sale proceeds, and there were some other costs associated with the sale. 250 for a management pack, for example. Not sure that's much different from lots of leasehold sales, though.
vivster is offline
Reply With Quote Report Post
# 15
ShortieHere
Old 14-10-2012, 9:03 PM
MoneySaving Newbie
 
Join Date: Oct 2012
Posts: 1
Default

I'm in a shared ownership place. I am glad I bought it. The combined rent and mortgage I pay is cheaper than a mortgage if I owned 100% and cheaper, and more stable, than renting an equivalent privately.

I understand that some people say that have struggled to sell it, but that applied to everyone, not just shared ownership. My neighbours who were NOT shared ownership, took a year to sell their property.
ShortieHere is offline
Reply With Quote Report Post
# 16
mic69
Old 15-10-2012, 10:37 AM
MoneySaving Newbie
 
Join Date: Oct 2012
Posts: 2
Default

i am new to this website and would very much appreciate some help.

Me and my partner of 7 years are looking to buy a shared ownersip house , however due to my partners bad credit listings only i would be able to obtain a mortgage.

we have our deposit and money for solictor fees saved up and i have been accepted by a mortgage lender.

Would i be able to put my partners name down as owning the house with me?

Thanks in advance for any help.
mic69 is offline
Reply With Quote Report Post
# 17
Jellybean_Jo
Old 15-10-2012, 11:14 AM
MoneySaving Convert
 
Join Date: Feb 2012
Posts: 116
Default

Shared ownership isn't necessarily the best move for everyone, and is something you should only go into once you fully understand any terms and conditions etc. Don't let people scare mongering put you off...that happens a lot on here, usually from people who don't fully understand what it is they're criticising. If you can, avoid the new builds and go for re-sale properties.

I'm in a shared ownership apartment now, and I love it. The rent and mortgage combined is considerably cheaper than it would be as a private rental, or if I had a mortgage on the whole thing. I afford the payments comfortably, but as I'm on my own, with only one salary it would have taken me forever and a day to save up a big enough deposit to buy 100% of anything in my area.

Just do your research, and make sure you fully understand what you're getting into, and perhaps more importantly, what you would have to do to get out!

And make sure you know the difference between shared OWNERSHIP and shared EQUITY!
Jellybean_Jo is offline
Reply With Quote Report Post
# 18
julieb1987
Old 15-10-2012, 12:57 PM
MoneySaving Stalwart
 
Join Date: Jul 2007
Location: Macclesfield,Cheshire
Posts: 243
Default

As you're looking at a new build why don't you think about entering a Newbuy scheme? You normally need 5% deposit for this. Have a look on the development company's website or just call and ask them if they have any properties in a Newbuy scheme. The government's Newbuy scheme website is here... http://www.newbuy.org.uk/

While I appreciate that shared ownership is a great way to get onto the property ladder, I feel that if you have the money to buy somewhere outright, you should go for it. Friends of mine bought a flat under shared ownership on an interest-only mortgage so they had decent monthly repayments. However, they are now paying some capital and their combined rent/mortgage repayments are nearly 1000. Also, they are married and have a 2 year-old and are trying to buy a house, but they're struggling to sell their share of the flat.
First Time Buyer: Mortgage Offered, Searches complete, Exchanged 21/12/2012, Completion 04/01/2013!
julieb1987 is offline
Reply With Quote Report Post
# 19
Jellybean_Jo
Old 15-10-2012, 1:14 PM
MoneySaving Convert
 
Join Date: Feb 2012
Posts: 116
Default

Quote:
Originally Posted by julieb1987 View Post
As you're looking at a new build why don't you think about entering a Newbuy scheme? You normally need 5% deposit for this. Have a look on the development company's website or just call and ask them if they have any properties in a Newbuy scheme. The government's Newbuy scheme website is here... http://www.newbuy.org.uk/

While I appreciate that shared ownership is a great way to get onto the property ladder, I feel that if you have the money to buy somewhere outright, you should go for it. Friends of mine bought a flat under shared ownership on an interest-only mortgage so they had decent monthly repayments. However, they are now paying some capital and their combined rent/mortgage repayments are nearly 1000. Also, they are married and have a 2 year-old and are trying to buy a house, but they're struggling to sell their share of the flat.
Personally, Newbuy is a scheme I would avoid. But then, I would be wary of buying a new build at all, with or without a scheme.

Buying a new build with a 95% mortgage to me just seems like an instant path to massive negative equity given that the prices of new builds are inflated anyway.

I guess this is just an example of why it's something that needs research as to what scheme is best for your individual needs.
Jellybean_Jo is offline
Reply With Quote Report Post
The Following User Says Thank You to Jellybean_Jo For This Useful Post: Show me >>
# 20
julieb1987
Old 15-10-2012, 1:23 PM
MoneySaving Stalwart
 
Join Date: Jul 2007
Location: Macclesfield,Cheshire
Posts: 243
Default

Quote:
Originally Posted by Jellybean_Jo View Post
Personally, Newbuy is a scheme I would avoid. But then, I would be wary of buying a new build at all, with or without a scheme.

Buying a new build with a 95% mortgage to me just seems like an instant path to massive negative equity given that the prices of new builds are inflated anyway.

I guess this is just an example of why it's something that needs research as to what scheme is best for your individual needs.
I agree, as I would also avoid a new build. We are in the process of buying our first place and it is an ex Local Authority house which is very well built and has huge rooms costs a lot less than a new build. It's just the OP was talking about wanting a new build so thought I'd throw the idea in there.
First Time Buyer: Mortgage Offered, Searches complete, Exchanged 21/12/2012, Completion 04/01/2013!
julieb1987 is offline
Reply With Quote Report Post
Reply

Bookmarks
 
 




Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

 Forum Jump  

Contact Us - MoneySavingExpert.com - Archive - Privacy Statement - Top

Powered by vBulletin® Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.

All times are GMT. The time now is 10:45 PM.

 Forum Jump  

Free MoneySaving Email

Top deals: Week of 23 December 2014

Get all this & more in MoneySavingExpert's weekly email full of guides, vouchers and Deals

GET THIS FREE WEEKLY EMAIL Full of deals, guides & it's spam free

Latest News & Blogs

Martin's Twitter Feed

profile

Cheap Travel Money

Find the best online rate for holiday cash with MSE's TravelMoneyMax.

Find the best online rate for your holiday cash with MoneySavingExpert's TravelMoneyMax.

MSE's Twitter Feed

profile