Is Shared Ownership a way of getting long term security of tenure?

chickmug

I would be glad of some help with Shared Ownership as it is something I am very rusty on. It may be an option for a guy early 60’s, wife similar age, who used to do some work for me who has hit hard times. He has been self employed for many years and had to give it up through a condition called M.E. He is only able to work a little each day, lives in rented and has done for most of his life. They yearn for stability of tenure as they have been forced to move every few years and are sick of doing so as they find it very stressful and each time have found they have been forced into new neighbourhoods.

I wonder several things?

There are the House builders schemes and then the Housing Association schemes but I wonder what is the difference between the two. I assume the builder ones are because they can’t sell the house but the Housing Association ones are more of a Social Housing thing and therefore perhaps more genuine.

This guy started taking his pension recently and found there was a lump sum of £50,000 which is sitting in his bank and I wonder, to get them security of tenure if he were to buy a SO place which I see on Rightmove as low as £20-£30k for a 25% share?

Are those that offer these schemes only interested in people who will keep buying more and more shares or are they happy to let someone buy a small share and live there long term.

I know many will say these schemes are a scam to get higher prices for house but the way I am looking is a £25K outlay with £200 pm rent and stay as long as you want and have something to sell if it came to needing to do that.

Help please?

Meenu

Hi
i have had a shared ownership home for coming upto 7 years, I found the housing association to be helpful and in essence they own whatever % you dont, when it comes to selling you offer it to them first at market value but after 6 wks you can put it on the open market. It enabled me to buy a property that has increased in value and they have come in when necessary for structural things however bear in mind you are responsible for maintenance. It offered me security as I was buying by myself and usually when I need assistance they point me in the right direction. I would recommend it as it was one of the best decisions I ever made and I was grateful and blessed for the opportunity. In terms of ownership I imagine contracts vary but are probably similar to mine.

chickmug

Hi Meenu

Thanks you for your feedback.

It is ironic I have suggested this to many a couple, over many years, and many years ago, but have lost touch with all. The one thing in common was they were all renting and felt they would never own and they did. The last was probably 6/7 years ago but they split up sold and each came away with a tidy sum of money.

PasturesNew

If it were me at that age, I'd certainly be very interested in buying into SO to secure long-term security of tenure.

I'm just a tad younger and seriously thinking it would be on the list of "maybe" when I do buy a house in 2-3 years. It's all about location though ... pick a good one, on the smallest estate.

I think I've also seen some SO for retirement properties - although all these schemes are randomly available around the country, so not everywhere - but if you look for them specifically. In fact, I think there is one company that ONLY build SO retirement places - I had a peek online, looked nice.

So, it's a YES, from me.

bitsandpieces

Yes - it can be an excellent way to do this.

They should remember that rent and (if applicable) service charge may increase in future and - if they do move at some point - they will be stuck paying rent until the place sells. Also important to cost in maintenance of the home - they will generally be responsible for much or all of this.

They should be sure of going in with eyes open about the potential costs and downsides - e.g. what happens if the boiler packs in and needs replacing? If you own the place, it's also much harder to move if you get a nightmare neighbour move in. But this can be an excellent way to get secure tenure at a reasonable rate.

carefullycautious

I must admit that this is something I have thought about. However, the idea of having to pay rent for the rest of my life plus maintain the property and or service charge puts me off. I have found with some bungalows in my area that the housing association also take a percentage of any rises in price when sold.

Looking on rightmove there seem to be many flats around the 60,000 to 80,000 mark (not sure where your friends live) would it make more sense to wait and see if they could buy outright or take on a very small mortgage. Just a thought.
How did they come to be long term private renters?

chickmug

carefullycautious wrote: »

I must admit that this is something I have thought about. However, the idea of having to pay rent for the rest of my life plus maintain the property and or service charge puts me off. I have found with some bungalows in my area that the housing association also take a percentage of any rises in price when sold.

Looking on rightmove there seem to be many flats around the 60,000 to 80,000 mark (not sure where your friends live) would it make more sense to wait and see if they could buy outright or take on a very small mortgage. Just a thought.
How did they come to be long term private renters?

Thanks for your feedback.

I doubt if they could easily get much of a mortgage on low income and they seem very anti getting one. Not sure of the full history but they used to own and had to sell as he lost a job. So moved and thought they would rent short term but made the mistake, a lot of people made, and got caught by the sudden rise in prices.

They seem happy to move to a toally different location whilst they feel young enough to make new friends.

gabyjane

Hi i have the same situation as meenu and i love our house, we waited a long time to get this and i am so very grateful as it is a gorgeous house at a very affordable price!!! BUT where we live it would not be possible for your friends to buy as they have too much money. We had to have a certain amount of savings and no more be eligable, my friend recently tried this so i know it is true as she was declined BUT this is where we live so may differ. I was a little annoyed with my friend actually as SO is for people who cannot get on the housing ladder and she would have been able to just buy most of her % outright which pushes others out. We waited years to be able to get a house where we live and if that was the case we would prob still be waiting.
I really hope your friends get somewhere but would have to look in to it..can they not apply for council housing?

chez22

It really depends on the scheme, on the SO estate where I live there are no restrictions on who buys here. There are quite a few retired couples who have bought here by downsizing and have bought either outright or 75%.

carefullycautious

Pastures can you say which company are building bungalows exclusively for shared ownership. I would be interested to look at this.

I understand if you dont want to say

nearlynew

Shared ownership schemes only arise because of a combination of high house prices, poor social housing provision and inadequate tenancy laws.

If the situation regarding any one of thoses things was changed then things would be much better.