shared ownerships your thoughts

Fight_Club

ninky wrote: »

i got this link on the ownhome scheme from another thread.

http://www.ownhome.co.uk/servlet/Satellite/1213946567253,CFSweb/Page/CFSCtplBlank

if you are a first time buyer or a keyworker looks like a much better option. you get 100% mortgage and some of the loan is interest free for 5 years.

That ownhome scheme looks good - is there a catch? Nearly all first time buyers fall under the "who can apply" and this:

"Places for People could lend you between 20 and 40% of the value of your new home - with no interest payments for the first five years"

and this:

"After five years you would be charged a fixed rate of 1.75% interest on your Ownhome loan each year. After a further five years this would increase to a fixed rate of 3.75%."

looks a good thing?

Fight_Club

a ha first catch found:

The Ownhome loan is an equity loan, which means that it is tied to the value of your property. Over time the value of your home will increase (or decrease), and so will the amount that you will need to pay back.

Meaning that unlike a conventinal mortgage, where the real value of your mortgage payments falls over the years, yours won't they will keep rising (assuming house prices rise in the long term).

ninky_2

Fight_Club wrote: »

a ha first catch found:

The Ownhome loan is an equity loan, which means that it is tied to the value of your property. Over time the value of your home will increase (or decrease), and so will the amount that you will need to pay back.

Meaning that unlike a conventinal mortgage, where the real value of your mortgage payments falls over the years, yours won't they will keep rising (assuming house prices rise in the long term).

well spotted. but at least it sounds like a guarantee against negative equity, as if your home falls below the value of the loan, you will actually owe them less (could well be worth considering at the moment). the only difference is the increase in equity will also not be yours.

geoffky

Shared ownership is failing to act as a stepping stone to full home ownership, leaving many people in worse positions than if they lived in other types of housing, researchers have found.

A Joseph Rowntree Foundation investigation shows that only a very small proportion of residents are actually able to move into full
ownership.

While some shared owners are able to move on due to improvements in their finances, many are unable to afford the greater cost of a full ownership mortgage, the study found.

Shared owners’ typical starting investment has declined from 50 per cent to 40 per cent, with 25 per cent shares now more common.

And evidence suggests that just 3 to 5 per cent of shared owners are able to move on to another property.


http://www.insidehousing.co.uk/story.aspx?storycode=6501770

llh189

geoffky - you have posted this very same message heaps of times now - we all get the message!

zag2me

I have a shared ownership flat and it was the best financial decision I've ever made in my life.

The identical flats on other floors of this building privately rent for £200 more than I pay with a 40% shared ownership. Its a no brainier for me.

Shared ownership schemes suit single people who cant raise a full mortgage at the time of wanting to buy.

poppysarah

zag2me wrote: »

Shared ownership schemes suit single people who cant raise a full mortgage at the time of wanting to buy.

Is it a 1 bed flat?

Please report back periodically so we can continue to hear how great it is.

gabyjane

Hi where we live ownhome and SO are 2 completely different things so might be worth checking before ppl get carried away..also things such as a new kitchen bathroom etc do not (where we are anyway) have to be asked about to the HA, things like knocking walls down, loft conversions etc do BUT in all houses i guess you'd have to do some of that partially with planning etc...All repairs are to be paid for but then again why wouldn't they?

gabyjane

Reading over this thread again we do seem to have crossed with this ownhome scheme and the SO i can only say our property is not the ownhome one.

This is how i see ours and is only my life lol BUT..I have rented since i have been 18 and lined numerous landlords pockets, up until i met now dh i would have never save as numerous things happening and only just being able to pay the rent etc ruled out saving any deposit, when me and dh had settled we looked into the SO scheme and put our names down, when i knew we were actually going to stay together we decided to stick with our origional idea of the SO scheme as houses were dire for the price and mortage fees have NEVER improved as far as im concerned interms of SO ones.....we awaited houses to come up for years as where we live it is very hard we were delighted to be offered one about a year and a half ago when we had almost given up and my grandad was going to help us out!

My ideal home is a new build, ideally town house..imagine my excitement when the one we were offered was this house..my dream house! seriously i know it sounds cheesy but i honest to god would have wanted the same house if it was for sale through an estate agents (well being truthful my ideal home is a huge converted barn in the middle of nowhere with pool but hey lets not go there!)...AH but they were as the development we live in is mixed houses so up the rd from us is a set of houses EXACTLY the same but smaller dimensions than ours (no idea why) for at the time well over what we paid for this..How can ours be any worse off when 1..we never needed any deposit to get the house and only paid solicitors fees (well my darling grandad did) and 2 the other house was imo very overpriced..

We have lived her for a year and a half and tbh have still had a great life, we have a very cheap mortage and rent, our areas surrounding the houses are cleaned, mowed etc without us paying any monthly upkeep charge and we LOVE it..we can still afford our holidays and new car etc and that is just as important than owning a full house as such..best move we ever made for US!

chez22

I bought a SO house in 1995, I was single and on a low wage and it was the only way I could get on the property ladder. I bought the other half of my house in 2004, (as many others have done on this estate). There is no way I could have afforded this house otherwise, I think it was the best move I ever made. As long as you go into schemes like these with your eyes open I think they are an excellent idea.