Co-Ownership?

Kataratarina

thanks for the reply.

can i ask why did u decided against it?

Lobell

You need to consider if you will ever be in a position to buy the rest of the property...and what the implications might be if you won't.

Say you buy property today that is valued at £120k (so you effectively 'pay' 60k for your share in very crude terms). In 2 years, you decide that you can buy the other 50% of the property off co-ownership. The property will be revalued and you'll pay 50% of the new valuation plus all the usual associated solicitors/conveyancing fees etc.

A friend bought her flat through co-ownership about 20 years ago. The value of her property rocketed to about 10 times what she originally paid for it which left her in a position that she was never able to buy out the other half. Wasn't really an issue for her but it might be for some people. Also, she was never able to take out a secured loan as she couldn't find a company that would recognise her as the homeowner.

arkonite_babe

We have a thread similar to this already, I'll add your query to it so all the replies are together. Posts are listed in date order so you'll need to read from the beginning to catch up

thriftyminx13

From my a colleague at work...I know the co-ownership path was verry slooooowww and took a lot longer. If this isn't an issue then the other comments regarding rise in property prices and buying back the property needs considered.

some builders are doing deals where they will pay part of your deposit and then in 5 years you pay back the deposit or something like that. sorry for the vagueness, maybe someone else knows what I'm on about. it's been a long week at work and my brain is fried!

Kataratarina

a girl in work bought an apartment co-ownership- when she sold it she got her half paid co-ownership and made about 30k in between, without anyone knowing but her. so this 30k went on a deposit for a new house?

does that seem right?

Indigo's_Mum

I bought my first house 13 years ago (OMG....wa it really that long ago?) with Co-ownership and it was amazing. The best advice I would give is that you need to buy as much as you possibly can and as fast as you possibly can. I bought 3/4 one year and the other 1/4 next year when the cost of the house had barely changed....leave it too long and you have more to pay.

I got 100% mortgage for the first part and paid £250 to co-ownership which covered my solicitor, survey and 1st months rent.....and I got change. When I bought the last part worth £6000, I only had to find 10% of this for my mortgage deposit.

purt

Really useful thread folks. Thanks

Kataratarina

when u say buy as much as u possibly can as fast as u possibly can?? does this mean u would increase your half- this is the part i dont understand-how would you go about buying the "other half"

Indigo's_Mum

The least you can buy is half initially. You can then buy the rest of the house off co-ownership in 12.5% sections as you can afford them.

So, you buy a house worth £100,000. You pay £50,000 and Co-ownership pay £50,000. In a year's time you decide to buy in a bit more, and the house is still valued at the same, so you buy another quarter for £25,000. You now own 75% and co-ownership own 25%

At any time you can buy the last 25%, or maybe just 12.5% (1/8) of the remainder. Clear as mud?

Remember, the more you own the less rent you have to pay to co-ownership for their share. Buy the rest of the house off them as soon as you can as you always pay the percentage of the current market price. That means that if your £100,000 house rockets to £200,000 in a year and you only own half, to buy out the other half you have to pay £100,000.

There must be an easier way to explain this.

Kataratarina

Thanks, that does explain it! i currently pay between me and oh 550 rent plus bills etc.

i think this is the only way i can go because i have no funds for a deposit and my oh has a bad credit history!!!!

and i also know that it will be more because u have to get insurance and rates etc but i'll own half of my own house-more than i have now!!