Worried now I've bought a Shared Ownership Property

devon_guy

So here's the deal........

Been looking to buy for years but living where I do could never afford it. This flat comes up, new build, shared ownership, I look, I love so I buy. Did all my research on the price and comparing it to flats within 1/2 mile of where it is, it's reasonably priced.

However with prices as they are I'm worried about getting burnt. I did however not buy it thinking pound signs but as my home. It's a big flat, actually bigger than the 2 beds that were for sale. Surely in a way S/O is better as I only take a percentage of the loss should the property crash in value? Also if/when I choose to increase my share, if the property has devalued that is to my advantage is it not??

poppysarah

Most of the shared ownership are seriousy biased. Are you even allowed to own all of it? Is it a 1 bedder?
You've done the sums I assume to know it's affordable. And if buying a share in a property was enough for you that's fine.

devon_guy

I can own 100% of it yes and my mortgage and rent combined on the flat is about £100 a month less than if I rented it privately so I don't think it's that bad.

Running_Horse

Did you buy because you loved it and wanterd to live in it for a few years?

Or did you buy in order to make a killing in a few years?

Now that the deed is done stop worrying and enjoy life in your new place. I ended up in negative equity in the last slump, but only started enjoying life when I stopped seeing my house as a liability rather than an asset.

Life is for living, not calculating your equity. If you don't believe it, just look at the moaning obsessives on the price forum.

geoffky

have a read of this http://www.forbessolicitors.co.uk/stay-informed/display.htm?item=284&h=Rebecca-Richardson-v-Midland-Heart-Limited

zzzLazyDaisy

devon_guy wrote: »

I can own 100% of it yes and my mortgage and rent combined on the flat is about £100 a month less than if I rented it privately so I don't think it's that bad.

Okay, let's look at the facts.....

1 you couldn't afford to buy on the open market
2 you could have stayed in private rented, with higher housing costs and no security
3 you now have somewhere cheaper, with security, where you don't have to ask permission to put a shelf up, and where, presumably, you are happy

You did your research and made a decision that you were happy with. Yes prices are falling, and yes if you want/need to sell in the next few years, you could be in negative equity. But if you are happy where you are and with no plans to move, all that matters is that it suits you.

There are a lot of problems with some shared ownership schemes and some are little more than a legalised scam - but in some areas (the south east for example) this is often the only way someone can get a place of their own as there is hardly any social housing stock and both private rents and market prices are out of the reach of many people.

As I say, provided you are happy and have no plans to move, you have nothing to worry about.

GDB2222

geoffky wrote: »

have a read of this http://www.forbessolicitors.co.uk/stay-informed/display.htm?item=284&h=Rebecca-Richardson-v-Midland-Heart-Limited

That is simply astonishing! Anybody contemplating shared ownership should be aware of that case. It's so unfair.

In summary:
Richardson paid for 50% of the property and rented the other 50%. This went ok for 10 years, when she couldn't pay the rent and got repossessed. She lost the 50% she had already paid for.

Debt_Free_Chick

A word of caution about that Richardson case .... it was dependent on the terms of HER shared ownership.

It doesn't follow that ALL shared ownerships are the same. One needs professional advice as it depends on your particular contract.

GDB2222

True, but won't they all be in the form of a lease like that? Was her's particularly different? (Not enough detail in the report to indicate either way.)

esbo

It's the new form of council house.

Debt_Free_Chick

GDB2222 wrote: »

True, but won't they all be in the form of a lease like that? Was her's particularly different? (Not enough detail in the report to indicate either way.)

Well, the Court's ruling was certainly based on her particular agreement. Whether they're all like that .... who knows?

The thing about Court Judgements is that -whilst they form precedents - they are based on the particular circumstances of the case on which the ruling is given. You can only say, for sure, that the ruling applies, if other cases have similar facts/circumstances.

It seems that her agreement did not give her a share of the freehold - just a lease. We can't assume that all shared ownerships are the same .... they might be, but it depends on the precise wording of each agreement.