Shared ownership vs renting

PasturesNew

MasterBell wrote: »

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

Owning a house is more than just the rent or mortgage.

The costs of entry are high. Mortgage arrangement fees, solicitor, searches, possibly stamp duty (some make you pay FULL stamp duty on the whole cost right from the start).

The costs of exit are high. Estate agent fees, solicitor fees.

Then as a home owner you have to insure the building - probably £20/month.

As a home owner you'll want to titfer it about a lot more than if you were renting. Buying things, bits/bobs, furniture, painting it ... "because it's yours". It all adds up.

Then there's the maintenance you have to pay, the heating system servicing, get the plumbing fixed, boiler breaks down and there are parts ... it all adds up.

Don't forget also ... lost interest on the money you paid out on the deposit/solicitor etc. You'd lose that interest, which has to be factored into the cost.

MasterBell_2

the main reasoning is the fact my missus is preggers and we want the security of at least owning some of the house we are living in.

we have a joint income of 35k and the only way we would get a house from the council if we 'break up' and her parents wrote a letter to the council informing them she had been kicked out.

which isnt going to happen, so this seems like the best option to me, we have enough money to cover the deposit and fees

its more about security rather than the financial benefit

Wickedkitten

MasterBell wrote: »

the main reasoning is the fact my missus is preggers and we want the security of at least owning some of the house we are living in.

we have a joint income of 35k and the only way we would get a house from the council if we 'break up' and her parents wrote a letter to the council informing them she had been kicked out.

which isnt going to happen, so this seems like the best option to me, we have enough money to cover the deposit and fees

its more about security rather than the financial benefit

What part of the country are you in?

MasterBell_2

east midlands

thepeachyone

Ive been looking into shared ownership too and Ive noticed a huge variety of schemes available. Some you pay rent on, some you dont have to. Some are deposit paid, others expect you to find a deposit. Some are by housing associations and others seem to be by builders, others are developers using a Government product. Ive seen some really nice houses at a price I can actually afford - I need a 4 bedroomed house. I wouldnt be buying for the short term, but to stay there long term. To be honest, I cant see the problem with this. There is another thread on here posted by people who have bought shared ownership homes and havent regretted it. Try and find it Masterbell.

In the meantime, if anyone would like to explain the difference between the various schemes, please do. Also, is it better to go with a housing association or not?

thepeachyone

see thread here too

http://forums.moneysavingexpert.com/showthread.html?p=18531857#post18531857

zedyy

robin_banks wrote: »

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

Good article, Thanks.

MasterBell_2

there is no service charge?on the house im looking at

papercut1982

Hi - personally I would advise to stay away from S/O.
Been in ours for 3 years now and even with prices falling we still are not tempted to buy outright and we easily could.
Our mortgage is cheaper than our rent on 75% ownership, ok, we have paid a lot of the mortgage off but even so the rent / service charge is a real bug-bear.
We see no value in our service charge, they want £88 a month for b****r all, seriously you would never know that the cleaner had been in, windows cleaned and as for gardening - dont get me started.
Whats even more worrying is the contracts have just been re-tendered, which means come march/april we will get our new bill.
We have pain in the a*** neighbours, drug dealers next door and the H/A drag their heels doing anything about it, even though they own half the property.
Stick to renting and save save save, in my opinion its a total waste of money, at least one day what you have is your own (well, the banks!)
We rushed into it because I was 8mths pregnant and we wanted our own place (previously renting), biggest mistake ever.

MasterBell_2

there is no service charge with the property im looking at the the mortage would be around £300 and the rent £142,
Given that a house of the same size is up for rent over the road at £495

please understand this is a HOUSE not a flat, most of the problems seem to be with people living in flats