Shared Ownership advise please?

devon_guy

1. You share the blocks with housing association tenants some of which will be criminals and cause anti social behaviour. Nothing like stereotyping is there? I have worked in housing and can say the types you are talking about make up a very tiny proportion of overall tenants. The majority are hard working law abiding citizens.
2. Prices are extremely overvalued and build quality is poor. Where is your proof for this? My S/O property is independently valued and matched the mortgages valuation. On what basis are S/O properties poorer built than someone buying a house outright?
3. Service charges are inflated and rents rise above CPI inflation Service charges will be set by the management company not the HA
4. It is far harder to sell, you have to jump through hoops for ages before you can market with a normal estate agents. It is well known most people will stay well clear of shared ownership so your pool of people to sell to is smaller. You don't have to "jump through hoops" as you put it. There will be a condition that the HA has to have the first attempt at selling, anything from 4-8 weeks, after that you are free to sell wherever you like.
5. House prices are falling fast, get a normal flat at auction for 50% off instead. House prices are falling yes, but isn't that the same for everyone??

poppysarah

Shall we just point out the only people who have good things to say about SO are people who have bought them.

What advantages are there from buying half a house to renting a whole one? It just continues to support high prices which is wrong and utterly insane as the whole economy is falling over due to house prices inflation.

There are lots of different types with different rules but they are all the same basic thing - a place that is too overpriced to allow you to buy a whole one.

cats!

Jvic28 wrote: »

Who are you talking to cats!? Me? We pay £100 a month service charge which obviously covers communal arrears, CCTV, Concierge etc. I think that's pretty reasonable. A service charge would have to be paid if I owned the flat outright or rented anyway.

Yep, sorry I didn't make it clear I was asking you!

Thanks for the reply. So a charge of £1,200 per year.

How do rental figures stack uo for your block of flats? Just curious if it would be cheaper to rent, particularly as LL is responsible for service charge under those circumstances.

Jvic28

I looked at renting at the same time I was looking at buying and the service charge was still payable. My mortgage at the time was the same as the rent. My mortgage is now about £150 less than the rent monthly. Also, this flat is much bigger than the renter.

Jvic28

poppysarah wrote: »

What advantages are there from buying half a house to renting a whole one? It just continues to support high prices which is wrong and utterly insane as the whole economy is falling over due to house prices inflation.

I pay less mortgage than I would pay if I was renting and I actually own 75% of it rather than paying the landlords mortgage and own nothing.

devon_guy

Why do people insist on spouting this !!!!!! all the time about the prices being overpriced. If you buy a property from a HA then the price is independentlyset by a valuer. Also you couldn't get a mortgage on your share if the mortgage valuer didn't agree unless you were prepared to put in the shortfall. So please stop talking nonsense if you don't know what you are talking about.

I can't comment on the shared equity properties that developers offer. That however isn't shared ownership. People seem to get the two confused.

RoxieW

brit1234 wrote: »

Stay away from shared ownership they are a nightmare and con:

1. You share the blocks with housing association tenants some of which will be criminals and cause anti social behaviour.
2. Prices are extremely overvalued and build quality is poor.
3. Service charges are inflated and rents rise above CPI inflation
4. It is far harder to sell, you have to jump through hoops for ages before you can market with a normal estate agents. It is well known most people will stay well clear of shared ownership so your pool of people to sell to is smaller.
5. House prices are falling fast, get a normal flat at auction for 50% off instead.

To answer your points -
1) My SO property is the only one on a close of 20 houses. So does that make me the criminal causing anti social behaviour then? Hardly. It's a quiet close and one of the reasons we went SO was because the alternative that we could afford was to buy or rent in a rubbish area or on a council estate.
2) Again, we checked price comparable with rest of the street. Build quality is same as rest of full ownership street - plus under builders 10 yr guarantee as with all new builds. In fact, I'd argue that build quality has to be higher as OH is an architect and often works on social housing projects and there are more rules and regulations from the HA that have to be followed.
3) I have no service charge and my rent for 50% is £135. When we bought in 2004 is was £121. Rent for a comparable property would we approx £500 per mth so we're paying about half the fair market rent. Our mort is currently £225 so we can own half of the house for less than we would pay to rent a comparable house.
4) 4 weeks is the HA tie in. As per my earlier post I had no problems getting offers at asking price earlier this year. If we did have big problems selling then we would simply buy the remaining 50% from the HA so that we own the house outright. In fact, the only reason we havent done this thus far is because SA properties sell really quickly around here.
5) Fair point - but with a SA you only have half the risk of price falls. We're glad of this now but obv at the time of buying noone has a crystal ball as to what prices will do.

RoxieW

poppysarah wrote: »

Shall we just point out the only people who have good things to say about SO are people who have bought them.

What advantages are there from buying half a house to renting a whole one? It just continues to support high prices which is wrong and utterly insane as the whole economy is falling over due to house prices inflation.

There are lots of different types with different rules but they are all the same basic thing - a place that is too overpriced to allow you to buy a whole one.

I would have thought that the ones with actual experience of SO properties would have been the ones best placed to comment on whether they've found the scheme good or bad?
The advantage for us was that we could afford to live in a nice house in a nice area, instead of a horrid house in a run down crime ridden area.
At the end of the day - some people cant afford to buy 100% property in a nice area. Shared ownership offers them the option to get a foot on the ladder and a nice place to live. I agree that the various schemes need looking into carefully to ensure a good deal re purchase price/rents etc but in my experience shared ownership has been good to us.

Helga14

"Shall we just point out the only people who have good things to say about SO are people who have bought them."

Roxie just made the same point that I was going to. Those of us who have entered into SO probably know alot more about it than those who have read articles etc and some of the generalisations that people are making are completely wrong for lots of people.

So here are my experiences of the pro's and con's that I found for myself. I was able to buy a flat at 28 in London zone 2 in a good area less than five mins away from the tube on one of the most desirable streets in the area by doing SO. The only thing I could afford without doing SO were flats in scary estates with bad reputations or studios that were frankly depressing. After almost buying a SO new build flat there was a problem with it and I managed to find the flat I brought. It is an old property which used to be rented through the Housing Association and they sold it SO. So a period terraced house, which is huge for a one bedroom and could be converted to two bedroom. It was difficult to be allocated it as I wasn't the only one who want ed it and it hasn't all been brilliant. My aim is to own 100% of the property as soon as possible and I getting there. I brought more than 50% orginally and then have staircased once. So now only one small staircase to go.

The reasons for doing it were.

1. I couldn't afford to rent on my own in London. I had lived in shared houses, for ten years, paid rent for ten years and lived with a collection of ever changing flatmates some good, some bad. Also coped with a collection of landlords. Mice. Leaky roofs. Other peoples washing up and body hair.

2. What I could afford to buy without a SO scheme I didn't want to live in. I didn't want to walk 20 mins at night from the tube. Or live in areas were frankly it isn't particularly safe.

3. I wanted my own place, which was mine.

I would advise not buying a property so expensive that you will never be able to afford to buy the rest. Obviously this may not be possible for everyone. I see this as a way of going up the property ladder without moving each time my salary increases significantly. If i moved houses each time there would be over £10k in costs because of stamp duty, legal fees. estate agent fees etc.

Take independent financial advice on what you can afford to pay. Do your own budgets. The advisor that the HA arranged for me to see, tried to flog me an unsuitable mortgage so he'd get more commission. I had to convince them i could afford over 50% of the flat.

Compare the prices to property sold in the locality. Make sure you are paying a good price. I actually paid well under what the flat was worth at the time.. which given the price drops now is very lucky. I brought two years ago but luckily currently I'd need another 20% drop in property prices for me to me in negative equity.

My neighbours are actually pretty nice. They have all lived in the property for over 8 years each, one has been there 15 years. There isn't a constant change of people or the danger of short term renters who can be seriously anti social.

You can actually not feel to bad when the prices of property go down because it means that it will be cheaper to buy the rest.

Painful stuff..

Dealing with the Housing Association.. They are slow to act. Need constant chasing. Generally often confused about what to do when there is a problem. For example the tennants upstairs had a leak which has messed up my ceiling last week. I've called them 7 times so far and not had a straight answer about what they will or should do in this situation.

The rent and service charges do go up. Every year. Not by a huge amount but it is still annoys me.

When you staircase if the value of your property has increased then they will calculate the rent you pay on the remaining property you don't owe on the new value of the property. This was annoying and something i didn't realise.

Be careful of stamp duty. They say you can avoid paying it to start with but this may lead to problems because when you finally own over 80% ( I think) you have to pay it and if the value has gone over £250k it will be 3% of the value. I choose to pay the stamp duty on the whole flat initially to avoid any future bills from this.

You do have to get permission and make the HA aware if you making any major changes.

I had to get permission to get a pet which they gave.

You can't just rent your flat out if your circumstances change to have to get permission, which they may not give.

To sum up. It can work for you or it may be the wrong thing to do. Don't buy an overpriced new build flat. You may find some really well valued property.

scheming_gypsy

poppysarah wrote: »

Shall we just point out the only people who have good things to say about SO are people who have bought them.

What advantages are there from buying half a house to renting a whole one? It just continues to support high prices which is wrong and utterly insane as the whole economy is falling over due to house prices inflation.

There are lots of different types with different rules but they are all the same basic thing - a place that is too overpriced to allow you to buy a whole one.

so that would mean the people who have bad things to say about them are people who haven't bought one and have no idea?

I moved into my SO house 4 years ago.

brit1234
Stay away from shared ownership they are a nightmare and con:

1. You share the blocks with housing association tenants some of which will be criminals and cause anti social behaviour.
2. Prices are extremely overvalued and build quality is poor.
3. Service charges are inflated and rents rise above CPI inflation
4. It is far harder to sell, you have to jump through hoops for ages before you can market with a normal estate agents. It is well known most people will stay well clear of shared ownership so your pool of people to sell to is smaller.
5. House prices are falling fast, get a normal flat at auction for 50% off instead.

1 - nice generalisation there! what blocks?? my house was built 4 months before i moved in. From the houses i'm guessing there's a maxiumum of 10 SO houses and none are criminals, nurses, IT engineers, everybody has proper jobs. It's not a block it's 2 rows of terraced houses at the back of an expensive estate.
2 - The houses were built by the same people who built the rest of the estate and cost £125k for a brand new, 3 bedroomed terraced house. You can also get your own independant valuation on it like you can with any house and make an offer of what the actual value is compared to theirs.
3 - Services charges?? huh?? i pay the rent and that's it.
3a - Rent rises more than blah blah?? its a 60 / 40 in my favour. When i bought the house the rent was £50 a month which included buildings insurance. Now it's about £53!
4 - you're starting to make things up now aren't you because you think its all grotty apartment blocks inhabited by criminals.
5 - House prices are falling fast.. .congratulations Einstein! that also means that if you want to buy the outstanding amount you buy it at the current value. So if i bought all my house back in 2004 it'd have cost me £125,000. I paid £75,000 for the 60%, if the house price drops to £100,000 due to the house market then it'll cost me £40,000 to buy the other 40%. Total cost of £115,000 compared to the £125,000 if i bought it all outright in 2004.. Yep it'd still be overpriced as the value would only be £100,000 but if i paid the £125,000 i'd be in a lot more negative equity.

A quick insurance quote on buildings insurance comes out at £13 a month. so i rent the additional 40% for £40... and people say its a con?


oh and i didn't need permission for pets which are: 2 dogs, 4 rats, 3 mice, 4ft tropical fish tank, 5 frogs and 7 snakes. Didn't need permission for a lodger either.