Ownhome scheme

londongirl

Thank you Carefully Cautious. It is nice to see at least one person sees where I am coming from! :-)
They asked me if i had a deposit to put down and I said no - that was it. They did'nt ask for proof of savings or anything. And in my mind that money wasn't really for a deposit it is my back up money for if i lose my job or something (or if i want to buy the rest of the house at a later date), so even if they had asked me if i had a deposit and needed to use it I would have argued that I needed some for furniture etc and emergency money.Plus half of that money wasn't actually mine at the time when i signed for the flat but i knew it was coming to me, as it was given to me as an advance on my inheritence from my nan.

To the original poster (who i notice hasn't been back since the rest of us started posting with avengence!!) - don't be put off by people's negative comments - look at your own situation carefully, consider all your options and work out what you would do in all cases in a few years time with different scenario's and you should be fine. It is like any purchase or financial investment - there are pro's and con's to all of them but for people to come on and just so don't do it - it is not necessarily helpful to people who are obviously enquiring about these schemes for a reason.

That's it from me on this threat I think! :-)

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

Graham_Devon

geoffky wrote: »

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

Shared Ownership isn't failing.

The link clarly states peoples finances have not changed and they are not able to afford a full mortgage.

That's hardly surprising, considering the events of the past 6 years where houses only became further and further away to everyone, not only shared ownership tennats.

There was also a lack of FTBs on the market, due to the above.

MigsyBigsy

To the original poster (who i notice hasn't been back since the rest of us started posting with avengence!!) - don't be put off by people's negative comments - look at your own situation carefully, consider all your options and work out what you would do in all cases in a few years time with different scenario's and you should be fine. It is like any purchase or financial investment - there are pro's and con's to all of them but for people to come on and just so don't do it - it is not necessarily helpful to people who are obviously enquiring about these schemes for a reason.

That's it from me on this threat I think! :-)[/quote]

Hello,

dont worry, i have not been put off. I too echo the email which cautious wrote.

regards and thanks again

stanleyfox69

Well said Londongirl.

I don't understand why people are so quick to shoot down this scheme.

For people without large enough deposits to satisfy the mortgage lenders in the current market, for people who meet the "ownhome" criteria, this is a great way to get onto to housing ladder.

I have applied, have received instructions and waiting for my telephone interview. Hope to sort something out whilst the property i am after stays available.

In my scenario, most people need a 15% deposit LTV (based on average lender requirement), for a 1 bed house, in decent condition and a nice area, i'm looking in the region of £24k (Got to love St.Albans for housing prices).

The ownhome scheme, as a first time buyer, household income less than £64k and key worker, this is a secure way of achieving a step on the ladder.
Any why not now whilst housing prices are relatively low in comparison to what they have been 2 - 5 years ago.

ninky_2

londongirl wrote: »

Yes at current market value after 3 years (within 3 years if you want to pay all or some of it back you can at the same amount you borrowed it for).

So as everyone is saying prices are going to drop even further i'm in a better position. Two people buy a house today - one with ownhome , one without. First person pays 100k (60k mortgage, 40k ownhome) and 2nd person pays 100k (25k deposit, 75k mortgage).
House prices drop by a further 25% both houses therefore worth 75k. Person with ownhome - now owes ownhome 30k not 40k if they want to buy the rest of their house. Therefore total price paid is 90k. Person two with deposit has still paid 100k. If they want to sell they have lost their 25k deposit. Person 1 has lost only 15k (well would have to find 15k as would be 15k short - however buy paying less mortgage and buying an affordable house to them in the first place hopefully they would have been able to save)

well said. by the looks of it (and i'm not an IFA), this scheme effectively protects you against negative equity. the capital you pay off remains yours. the downside is the capital gains from a rising market are also not yours. but given that these seem very unlikely in the foreseeable future i seems like an option that is well worth considering. it is better than paying rent out to a private landlord when you could be putting your money into your own equity pot with this scheme.

the fact that you can look at all properties on the market and put an offer in also makes it much more attractive than shared ownership new builds that are very overpriced. with this scheme you retain the bargaining power of a "buyers market".

plus the interest rates seem very competitive.

First_time_buyer_9

Thanks London girl for explaining the ownership scheme.
I have been looking in to the my choice home buy and now i not sure which one is better.
Can anyone help pleas

rocking69

First_time_buyer wrote: »

Thanks London girl for explaining the ownership scheme.
I have been looking in to the my choice home buy and now i not sure which one is better.
Can anyone help pleas

They both have their ups and downs. Remember that with Homebuy you will need about £4000 upfront. Not exactly sure what its for yet as I havent got that far.
I would be curious to know if you can apply to both?
I think on the MyChoice website it says that the funding is not allocated until the full reservation has been made. Does anyone know?

blunt_crayon

rocking69 wrote: »

I think on the MyChoice website it says that the funding is not allocated until the full reservation has been made. Does anyone know?

i think that's the same for both ownhome and mychoice homebuy - basically the equity lender has a limited amount of funds and you aren't guaranteed the loan until you have made an offer on a house. i have heard of people who made offers on houses then were told there was no funding left so had to withdraw from the purchase... gutted.

i am interested in the ownhome scheme and applied a while ago but the thing that put me off was the minimum amount that we had to borrow... 3x joint salary (136k) and then to get the better interest rate (5.09% at the time) a maximum 75% LTV which would have made our minimum purchase 180k... ideally we would probably be looking at making offers around the 170k mark on the properties that we would be interested in, and it seems a strange concept as a buyer to have a minimum amount that you have to bid over...?

now i have checked the rates again and with a LTV of 80% we could get a 3, 5 or 10-year fix at 5.99% which although it appears high to me compared with the current base rate, i understand that the base rate historically averages 6-7% so would be a good deal over the life of the mortgage. the best open market rate with 10% deposit is also 5.99%.

so much to think about...i can't decide whether to try and save a deposit and buy normally in a couple of years, by which point interest rates might be sky high, or to use the ownhome scheme but only own 80% of the house and have to have a minimum house purchase of 170k.... any advice??

Graham_Devon

I can't comment on which is best, but the minimum price sounds suspisious. Much like the government trying to keep house price levels over a certain amount.