Who's found shared ownership housing good for them

ruggedtoast

chez22 wrote: »

Yes I am. That's what houses on this estate sell for.

Oh really. Most enlightening.

Running_Horse

It has been extremely good for me; inflating the price of my fully owned house far beyond what it should be. Why should I care if this is the only way the next generation will be able to buy a property? I'm alright Jack.

Catblue

chez22 wrote: »

Shared ownership has definitely worked for me, I bought 50% of my house in 1995 and the rent on the rest was under £100 a month. I was on a low wage and could not have bought a house any other way. I bought the rest of my house 5 years ago, I now have a 50k mortgage on a house worth nearly 3 times that. Many other people on this estate have also bought their houses outright or increased their share. A lot of people seem to have an extremely negative view of these schemes, all I can say is it was the best decision I've ever made and it's worked well for me.

Do you mean that you sold the shared ownership house and now live in a different house?

Or do you mean that you "bought out" the shared ownership element by means of a conventional mortgage and are still living in your first house?

chickmug

ruggedtoast wrote: »

Oh really. Most enlightening.

Are you trying to be funny - not amused!!

Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps.

chez22

Catblue- I bought the rest of my SO house and am still living in it.

Idiophreak

Running_Horse wrote: »

It has been extremely good for me; inflating the price of my fully owned house far beyond what it should be. Why should I care if this is the only way the next generation will be able to buy a property? I'm alright Jack.

I really don't understand why there's so much hostility toward these kinda schemes - or more specifically, toward the people on them. Sure, they probably inflate house prices a little...but nowhere near as much as BTL mortgages do. I'd rather direct my hostility toward the greedy individuals responsible for driving up house prices in the first place, rather than FTBs trying to get a foot on the ladder.

Wickedkitten

Idiophreak wrote: »

I really don't understand why there's so much hostility toward these kinda schemes - or more specifically, toward the people on them. Sure, they probably inflate house prices a little...but nowhere near as much as BTL mortgages do. I'd rather direct my hostility toward the greedy individuals responsible for driving up house prices in the first place, rather than FTBs trying to get a foot on the ladder.

If these didn't exist then you wouldn't actually need help getting on the ladder.

Prices are coming down and the amount of shared ownership/equity schemes aren't helping them go down any further.

Running_Horse

Idiophreak wrote: »

I really don't understand why there's so much hostility toward these kinda schemes - or more specifically, toward the people on them. Sure, they probably inflate house prices a little...but nowhere near as much as BTL mortgages do. I'd rather direct my hostility toward the greedy individuals responsible for driving up house prices in the first place, rather than FTBs trying to get a foot on the ladder.

I have nothing against the people buying these tiny city centre flats. Unlike some, I want them to own 100% of their first home, even if that means saving up a little longer. The only people who seem to benefit are greedy developers flogging rabbit hutches for way more than they are worth. Right now there are numerous empty new build flats in Madistone (look on Rightmove), and instead of lettting them fall to their true value, part share schemes are locking FTBs into a property they will have outgrown in a few years, but probably be unable to afford to move from. How does that help anyone?

These schemes are great for family homes in expensive areas, but should not become the standard way of joining the property ladder.

elliebobs

I've not had any personal experience with SO however I do know a number of people who have. Admittedly it was prior to the boom and they sold at the height of the boom and make a whopping profit that allowed them to get a full mortgage with a very nice deposit. Had it not been for the SO scheme they would never have had the opportunity to get on the property ladder so in that respect I wouldn't knock it. It's worth mentioning that they did not enter into the SO scheme with the express aim of making a killing on the property market but merely as a way of buying a home. If someone is desperate to get on the property ladder then why knock it????

Beardmidget

chickmug wrote: »

Who's found shared ownership housing good for them?

Well, honestly, the developers.

Basically the traditional hostility to SO tends to stem from the fact that it is not an ideal way of buying a home. For several reasons it is probably the worst of both worlds. They can be an expensive trap that can be a struggle to sell, and will leave you with very little to show for your investment. The extra money that could have been paying for the extra mortgage on a wholly owned property goes instead as rent- so same cost, much worse return. (I do appreciate that not everyone has the income to afford more mortgage.)

That it not to say that SO hasn't been the right decision for some people- just that it is often not the right decision for many.

The present hostility is a less complex question: in this market, SO homes prices are not falling in parity with other property.

This is because they are still at the bottom of the market in terms of price- the price advertised for a (say) 25% share will necessarily be A LOT cheaper than the price advertised for 100% of a non-SO property. However- the (notional) value of 100% of the property will tend to be markedly more than the wholly owned property. I currently live near Camden, and when searching for a property to buy, came across a SO flat which had a (notional) 100% value of around 250k more than an equivalent wholly owned flat. In spite of this, they offer the opportunity to buy into a flat for an apparently low price, and some find this irresistible.

The other reason that SO prices are not falling in the same way as wholly owned newbuild flats and houses is that unlike those properties, the housing company can't simply cut their losses- they have an interest in the building for the long term (because they will retain their share of the property), and so can't afford to down-value their investment in such a radical way (imagine slashing 200k off the value of each flat in a 100 flat building... not a small chunk of change!); their whole business model is built on the notional value they attach, not the true market value.
They may also be exposing themselves to the risk of having defaulters in the already-bought flats if they were to down-value. The occupants will necessarily be in a lower income bracket, and feel that they are unwilling to support a mortgage leaving them in negative equity.