Shared ownership vs renting

MasterBell_2

Hello all,
nned to know the pro's and cons, of both
do i need a deposit on a shared ownership? are there any difficulties in getting a mortgage for a shared ownership


Ive seen two properties similar and in the area where we want to live,
if i have the view of buying the remaining share of the house does this mitigate all of the pitfalls of shared ownership.

Im just struggling to see how this gets such bad press,
the shared ownership i am looking at is in a new development and a resale house, which is currently priced at a 57k for 50% with a 5% gifted deposit there is a house exactly down the street for around the 110k to 125k

A_shared-ownership_sucker

Don't touch the Shared-ownership! We 'bought' the lease for our shared ownership house in 2005 - we now have a house we can't sell, can't buy, can't rent out and can't afford thanks to the rent increases. It's all the disadvantages of renting combined with all the disadvantages of owning. If you don't pay the rent the co-owners/Housing association have the right to repossess the house and do not have to pay you back the share you bought! - This has happened! Therefore mortgages are tougher to find for S/O homes.

If you want to buy more shares it involves all the same solicitor’s fees when you first purchased a share.

Ask yourself why is it a resale? 5% gifted deposit - so the sellers are really desperate to get out of the con they've signed up to - just like us! To give you an idea we bought our house and began paying £280 a month rent, plus service charge. We now pay £350 a month. When house prices and rents are coming down our lease allows this rent to increase every year for the next 125 years and any poor mug who'd be foolish enough to take the house on will have to take on the lease...

New build home buy (new shared-ownership) charge much lower rents - for a house like ours £170 per month, as the government seem to realise their affordable homes scheme are too blooming expensive!

If I were you, (which I'm not!) I'd rent and try to save for a deposit on house on the open market and hope they keep on falling to an affordable level.

I have taken on the co-owners of our house to Managing Director level to negotiate our unfair rent and have been told basically - tough; you signed the lease, and unfortunately they have followed all the government guidelines - makes me sick to think of the con we've signed up for.

Good luck and best wishes

robin_banks

I don't normally post links but this is a very cautionary tale as to shared ownership;

http://www.guardian.co.uk/money/2009/jan/31/shared-equity-broken-dreams

robin_banks

FTR My OH and I pulled out of a shared ownership scheme scheme about 4 monhts ago, best thing we ever did.

virgo149

A_shared-ownership_sucker wrote: »

Don't touch the Shared-ownership! We 'bought' the lease for our shared ownership house in 2005 - we now have a house we can't sell, can't buy, can't rent out and can't afford thanks to the rent increases. It's all the disadvantages of renting combined with all the disadvantages of owning. If you don't pay the rent the co-owners/Housing association have the right to repossess the house and do not have to pay you back the share you bought! - This has happened! Therefore mortgages are tougher to find for S/O homes.

Just wondering what percentage of the property you now own? If you purchased a SO property, you would not own the lease until owning 100% of the property and I'm guessing as you still pay rent, that you do not own the lease. You purchased a percentage share and pay rent on the share owned by the HA. Some properties have restrictions which mean you may never own the lease even when purchasing 100% or you may not be able to staircase up to 100%, again never having the option to own the lease.

In relation to mortgages - there are products out there but as with every financial institution, you have to jump through hoops to get them these days. I work in the West Midlands and the Dudley BS and the Halifax seem to be the most frequently used these days. Many are even borrowing 100% of the amount they need to buy their share.

Yes, in case you are wondering, I work for the sales team of a Housing Association and would love to dispell some of these 'myths and misunderstandings'. If you want to know any more, please just ask.

BTW - Housing Associations are non-profit organisations, strictly regulated by the Audit Commission. They are not in the habit of selling to just anyone - you must be able to prove you are eligible and that your purchase is not only affordable but sustainable in the longer term.

robin_banks

Whay re shared ownrship properties overpriced ?.

MasterBell_2

but the house including the rent is cheaper (£50) a month than renting in the exact same house on the estate?

I might be niave but i just cant see the downfalls,
I went and spoke to the vendor when viewing he had genuine reasons for sale, and had lived in the house for 10 years the rent going from 102-142 in this time


also is it cheeky for me to offer a lower price than the asking even when he is giving a gifted deposit

Wickedkitten

MasterBell wrote: »

but the house including the rent is cheaper (£50) a month than renting in the exact same house on the estate?

I might be niave but i just cant see the downfalls,
I went and spoke to the vendor when viewing he had genuine reasons for sale, and had lived in the house for 10 years the rent going from 102-142 in this time


also is it cheeky for me to offer a lower price than the asking even when he is giving a gifted deposit

Have you figured in the costs for ongoing maintenance as well?

MasterBell_2

surely that can be said on buying any house, not just a shared ownership, wouldnt this can be cancelled out on the deposit that would be building in the house,

(please dont turn this into a house prices thread and the current economy)
we would probably be in the house for a couple of years??

PasturesNew

I think SOME shared ownership have their place, with the right reasoning and strategy.... however, MOST shared ownership buildings are inadequate... (site played up and it posted... now I continue).

I have had one in the past. It was a lovely little house, not a flat. It had a little front garden and a sunny back garden. It was in a nice enough area. I bought it, I had to sell it about 7 years later and was in negative equity. Because of the sums involved I happened to have enough in my bank and wrote a cheque out to cover that. My contract was that I could sell it back to the Authority - and I did.

The one I lived in was an early experiment. Only 6 properties were built: two old people bungalows, one studio for council rent, my SO studio, one 2-bed for council rent, one 2-bed for a SO couple (I wasn't allowed to buy the 2-bed as I was single, or I would have done).

I think they might be better suited to people at the end of their housing life, not the beginning. Right now, if I could find a perfect SO house, one I loved, in a good road, with a tiny shared portion, as a single person who cannot ever get a council place, I'd be prepared to buy into shared ownership just so I could blow all my money/savings, knowing that I'd be living there "for life".

But, the hideous blocks being built, flats and nasty places ... are mostly not good for anybody.

I see them as a "home for the rest of your days" option, rather than any false "foot on the ladder" dream.

Oh - and read the contract carefully about costs and obligations.

PasturesNew

MasterBell wrote: »

...we would probably be in the house for a couple of years??

For most people, buying a property for a couple of years has never been a good financial decision. Right now it's nuts.

Buying property has always worked best when you saw yourself living there for a long time. Really make it a home.