Are the shared ownership schemes a good idea?

thepeachyone

We have seen a lovely new 4 bedroomed house which we can actually afford as it is one of those that a housing association is offering where you share the ownership. It will be cheaper to buy this, and pay mortgage and rent, than just pay rent for a similar sized house.

However, I am aware that prices could fall and we could end up in a negative equity situation. But we envisage this move to be long term, so if we sit tight this may not happen over the long term.

We have discussed it in principle with the shared ownership scheme people and we qualify for this particular scheme, as it is only open to certain types of buyer.

Has anyone done the shared ownership? Is it working well? What are the long term prospects for such properties?

pandamonia

in a word. "no"

2muchdebt

There are a number of other posts on the forum on this topic, for example:

http://forums.moneysavingexpert.com/showthread.html?t=1432735

http://forums.moneysavingexpert.com/showthread.html?t=1454085

http://forums.moneysavingexpert.com/showthread.html?t=1453939

http://forums.moneysavingexpert.com/showthread.html?t=1458151

In relation to being able to afford this sort of scheme now, bear in mind the rents (and service charges) will go up so will you still be able to in the future?

Whilst I dont claim to have read this in detail, I did find a PDF file on "rents, rent differentials and service charges for housing associations" which gives some rates for the past few years - might help in forward planning some costs... http://www.housingcorp.gov.uk/upload/pdf/Rents_NOV_06_20061130155230.pdf

Richard_Webster

How does the "100%" market value compare to similar 5-20 year old houses in the area? In 10 years time nobody will be interested in the fact that this house is 10 years old as compared to 15-30 years old.

mbga9pgf

Have a look who takes most of the hit with falling prices but gains less if prices rise.

Shared ownership, another abortion generated by new labour to keep high house prices when what we actually need is prices collapsing another 20-30%.

SailorSam

The thing that would worry me in these schemes, the amount you will be paying each month; your mortgage plus rent, is it really that much less than a full mortgage would cost anyway ?
Think ahead 20yrs till you are going to sell one day, the value of your house has doubled, but you only own half of it, so you're not going to have as much capital to take forward to your next property.
While you're living there what are you going to pay out on improvements ? Maybe £10k for a conservatory, another £5k for a garage and £5k getting the garden nice. Does that add to the value ? you'll only get half. I may be wrong, i've never looked into it.

Rotwein44

I bought a house last June/July through a shared ownership scheme as I was paying stupid rental prices and have come out of it very well! I am a teacher, so was classed as a key-worker, although the schemes tend to be more open now.

Previously my rent on a 2 bed new build was £460 a month.

When i bought 50% of my new house last year (mortgage £56,500), the 50% rent was £140 a month and the 50% mortgage was about £350, so slightly more than when renting.

I was very lucky with my mortgage deal, getting in just in time and bagging myself a great life time tracker deal without the need for a deposit (as I didnt have one). I also got £500 from the housing association towards my legal fees. My mortgage has now dropped to about £220 a month, so i am overpaying each month on my mortgage, to pay off more of the capital! :T :beer:

I dont pay any other charges to the housing association other than the £140 a month rent and I have a 'staircasing' deal in place so that I can buy another 25% or the final 50% of the property as soon as I can afford to/want to! If/when i decide to sell, if I still only own 50% of the property then I believe I would sell back to the housing association.

I was eligible for a higher mortgage than i have but decided I still wanted to be able to afford to do things/buy things and not be stuck with no money each month but on the otherhand I couldnt afford a 'whole' house myself!

I believe that if I were still renting now, I would now be paying more than £460 a month! :mad:

I am happy to answer any questions you might have and found this website very useful

http://www.sharetobuy.com/

for helping me to find mortgages/solicitors/insurance etc!

Good luck with whatever you decide!

Rotwein44

SailorSam wrote: »

The thing that would worry me in these schemes, the amount you will be paying each month; your mortgage plus rent, is it really that much less than a full mortgage would cost anyway ?
Think ahead 20yrs till you are going to sell one day, the value of your house has doubled, but you only own half of it, so you're not going to have as much capital to take forward to your next property.
While you're living there what are you going to pay out on improvements ? Maybe £10k for a conservatory, another £5k for a garage and £5k getting the garden nice. Does that add to the value ? you'll only get half. I may be wrong, i've never looked into it.

Yes it can be substantially less a month compared to a full mortage.

osteoliz

sorry for adding this here but I can't figure out how to add a new thread!!

Does anyone know which lenders are currenlty offering shared ownership mortgages? We currently have one but are looking to move to a larger property with are bigger share, but our Building society are not taking any applications currently.

We would have 10k for a deposit

thanks for any help

Richard_Webster

Shared ownership, another abortion generated by new labour to keep high house prices when what we actually need is prices collapsing another 20-30%.

I don't think that;s entirely fair - it is more about Housing Associations getting conned into paying more than they should for newbuilds from builders.

thepeachyone

osteoliz wrote: »

sorry for adding this here but I can't figure out how to add a new thread!!

Does anyone know which lenders are currenlty offering shared ownership mortgages? We currently have one but are looking to move to a larger property with are bigger share, but our Building society are not taking any applications currently.

We would have 10k for a deposit

thanks for any help

Halifax, I think.