Shared ownership

dest

Hi,

Have been looking into buying a house on shared ownership with the local housing authority. Basically the purchase price is 127k, and i would be buying 50% share 63.5k and paying £145 rent on the other share. Its a new property and seems to be a pretty good price for the area


The housing authority assure me that it is a fair price and set at lower side of market value but they also will not accept any offers.

Was wanting peoples advise as to wether or not this is a good deal, and if anybody knows if there are rules regulating how properties on shared ownership are sold from housing associations?

Premier_2

dest wrote: »

... Basically the purchase price is 127k, and i would be buying 50% share 63.5k and paying £145 rent on the other share. Its a new property and seems to be a pretty good price for the area...

Presumably rental of a similar property would cost you more than £290 per month?

If so, it sounds a pretty good deal.

RoxieW

I have a shared ownership property - similar value and rent. It's worked out well for us. If you look around at similar properties that will tell you if the price is reasonable. The rent sounds reasonable - its similar to what we pay.

As for selling, we have to give our HA a chance to sell the property. If not sold within 4 weeks you can sell through an agent. Buyers have to be vetted though - just as you will have been.

If you staircase to increase your share to 100% then the property is yours to sell as you wish. HTH

robin_banks

The issue is valuation, there is a strong argument that shared ownership properties are overvalued - check the prices on a similar development that is not shared ownership, and also compare what these properties sold for.

There are not many lenders that lend on shared ownership.

Brittania, Ecology BS - you must buy 50% equity
Leeds, Ipswich, Halifax - 10% deposit
Nationwide - 25% deposit
Kent Reliance - 100% mortgage avaialble.

dest

Thanks for your help, for the area it seems to be a good price... There are very few simular properties in the area, however the closest is a new development with prices from 164k (obviously open to offers)... For older houses you could probably get a 2 bed terrace for 100-110k (what the house is) but it may need work and there would be no reduced rate rent


Actually had a few mortgage issues... was originaly with the Halifax, but they reduced my mortgage offer from 74k, to 39k because of shared ownership....

I have an appointment with the leeds bs on friday and im sure they will accept me, however i am unsure about using them as there interest rate is v high

Also i have an appointment with Britannia on wed which hopefuly should secure my mortgage.

Thanks Robin, will take into account the other lenders you have mentioned.

elgar_2

hi,

I bought a 25% share in a flat via HA in August. Its a nice new flat and with mortgage and rent its less than i could rent for. I got my mortgage deal sometime ago from Nation wide and it was the best around at the time. I took a lower share (I had initally wantd 50%) so I could make better deal (i.e. i had bigger deposit) There was ans still isnt any similar proprties around at under 100k (new or old)

The issues to think about is that you are essentially an owner but rights more like a tennant. For instance I want to put a shower (just one over the bath)into property, which I need HA permission to do, and as part of granted permission I have return bathroom to original condition when i leave, ie have shower out and all tidy!!
Also had tough trying to get snagging issues sorted as nobody takes responsibility...

Otherwise its been ok..so far, I couldnt have got a place to live at as good a deal.

Elaine

Austin_Allegro

I've looked into some of these schemes and personally I think they're little more than a means to prop up high house prices.

What's to stop the rented part rocketing in price, for example? You're paying a huge amount to be trapped into a rental agreement, so your'e getting the worst of both worlds.

They are designed as a way of getting one foot on the housing ladder with the assumption that the 'owned' half will go up in value and you can then sell the place on, pocket the 'equity' and move on to full ownership, but that's not very likely in the current market. In fact it's possible you'd even be stuck in negative equity, unable to move, and paying rent for the priviledge.

I was also put way down on the list for consideration for one of these 'great deals' by the HA (because I have the temerity to be single, in work and childless) and I didn't much like the chavvy feel of some of the places either.

robin_banks

The rate is high at 7.64%, but the fees are by far the lowest, in some cases over £1,500 lower.I forgot to mention Abbey, but there fees are £2499.00.

We applied for shared ownership with the Leeds and all was hunky dory until the valuations came in, the full value according to the Housing Association was £280,000 , the valuer on behalf of the Leeds BS was over £30,000 (or 10% lower) and HA's dont negotiate on asking prices, if this happens my advice is to walk away.