Shared Equity Question

DeadCat

Hi all

I am about to purchase a flat based on a 82 / 18% shared equity split. If you dont know what SE is it is not the same as shared ownership as I will own 100% of the property but I will have to pay the builder who leant me 18% of the value of the property back when I sell.

My question is if the property falls in value by the time I sell does the loss come out of the builders share or do I still have to pay them 18% of whatever I sell it for.

Thanks in advance

hundredk

Based on what you have posted I would think you'd share any gains or losses on a 82/18 % split.

poppysarah

I think you need to take proper legal advice and look over the terms of the contract.

You will own 100% of the property and will owe 100% of the money on it.

Is it really a bargain?

DVardysShadow

DeadCat wrote: »

Hi all

I am about to purchase a flat based on a 82 / 18% shared equity split. If you dont know what SE is it is not the same as shared ownership as I will own 100% of the property but I will have to pay the builder who leant me 18% of the value of the property back when I sell.

It actually looks like another name for gifted deposit.

My question is if the property falls in value by the time I sell does the loss come out of the builders share or do I still have to pay them 18% of whatever I sell it for.

No one here can answer that, it is for you to resolve with the builder [and your solicitor to establish if you buy]. But youn are asking exactly the right question.

PasturesNew

The contract will be individual to that builder, you'll need to read your contract

brit1234

Just a scam to keep prices high. Attracts desperate people who can't save a deposit and at a higher a higher risk. This is just more sub prime lending on over valued property.

Why buy a property which will put you into negative equity and stop you moving up. Far better to rent instead and buy when prices are cheaper whilst saving a deposit.

Its a no brainer

Auzelia

You will have to read the contract but with the LIFT scheme its %age based so they loan you x% then you pay them back x% once/if you sell your home, regardless of the value of the property.

DeadCat

brit1234 wrote: »

Just a scam to keep prices high. Attracts desperate people who can't save a deposit and at a higher a higher risk. This is just more sub prime lending on over valued property.

Why buy a property which will put you into negative equity and stop you moving up. Far better to rent instead and buy when prices are cheaper whilst saving a deposit.

Its a no brainer

If you can tell me the date in the future when/if house prices will reach their bottom then I will glady wait a bit longer and save more deposit. But you can't, and no-one can, and as I have been living with in-laws for over 4 years and saving it's time to get my own place and get on with my life .

brit1234

DeadCat wrote: »

If you can tell me the date in the future when/if house prices will reach their bottom then I will glady wait a bit longer and save more deposit. But you can't, and no-one can, and as I have been living with in-laws for over 4 years and saving it's time to get my own place and get on with my life .

No one can tell you when prices will hit rock bottom. What we can tell you though prices will be going down for a long time and then stagnate for years.

Yes quality of life is important, but negative equity and the shared ownership restrictions will make it difficult to trade up. Its a balance you have to weigh up.

I myself will buy when properties get to 4 times my salary despite likely further falls but at the moment prices are very overvalued. As well as newbuilds being smaller than ever and cheap quality.

new_home_owner_3

brit1234 wrote: »

No one can tell you when prices will hit rock bottom.

I myself will buy when properties get to 4 times my salary despite likely further falls but at the moment prices are very overvalued.

despite likely further falls??? are you actually saying there might not be further falls??

likely is the same as maybe, i dont think you are so sure yourself about further falls, when did you start questioning your own opinion???

Was it when you changed your signature?

Muhasib

brit1234 wrote: »

No one can tell you when prices will hit rock bottom. What we can tell you though prices will be going down for a long time and then stagnate for years.

Yes quality of life is important, but negative equity and the shared ownership restrictions will make it difficult to trade up. Its a balance you have to weigh up.

I myself will buy when properties get to 4 times my salary despite likely further falls but at the moment prices are very overvalued. As well as newbuilds being smaller than ever and cheap quality.

brit1234 - just to pose you a question based on your last comment: if your salary increased so that tomorrow the price of property was 4 times more are you saying that you will definitely buy? and even though you are certain property is overvalued and there will be price falls?