Shared Ownership Question????

Boze

Hi Everyone,

I am brand new to this forum and the concept of SO. I am a 22 year old student who has the expected student debt that follows (approx £22000). I am due to start a graduate scheme job in September and will be on approx £27,000pa.

I have always hated the idea of renting properties as I have always viewed this as lining someone else's pocket when I could be investing it in a house myself. But, as with most first time buyers, I do not have anywhere near the savings needed to afford a deposit and a full mortgage, especially in the London area.

I am planning to live with my Dad for the first 6 months to boost my savings up to about £15000-£17000, then would hopefully use this to pay a large part of a 25% equity in a 2 bed flat.

I have read up on the pros and cons of the SO scheme, but I honestly cannot see any other way for me to ever have enough money to do anything else without living at home for 7 years which is something I do not want to do at all.

What are your views on this plan? Also, I was planning on getting a two bed for the main reason that they are not much more expensive than one-bed flats, and by getting in a lodger, the rent money would easily cover any rent I would have to pay on the remaining 75% equity. Are you allowed to get lodgers into SO properties?

Any help would be much appreciated

Thanks

chrisandlucy_2

Hi,

I currently own a 50% share in a 2 bed flat. When I bought it 4 years ago it was, more or less, the only chance I had of getting onto the property ladder.

The rent on the other 50% has been really cheap, in my opinion. Currently rent, maintainance and building insurance is just under £175 on the other half which is valued at £59k. That £175 per month is all I have to pay on what I don't own. Currently I'm paying substantially less than friends who are renting lower value 2 be flats.

However, on the other hand my mate has a shared ownership property and the costs he has to pay are rather large. His flat is worth a bit more than mine, probably around £15k (so £7.5 on teh 50% he owns), but he has to pay about £250 per month rent on teh other half, plus a £2k fee once a year to cover maintainance etc.

So I guess it depends on the landlord as to how good a deal you get, so look around a few and make sure you know all the hidden costs!

Hope that helps a bit.

Oh, and just to add (as I know it can worry people), I'm now in the process of selling and have had lots of interest. I was concerned people wouldn't want shared ownership but am pleasently surprised by the interest, and rightly so in my opinion as it has been ideal for me.

Chris

Eddie74_2

Hi, I have a shared ownership property and. I have found it a really good experience, however, my landlord who is Jewish is charging me alot for my maintenance and complains that my food is not kosher

lembert

Hi, I work at a housing association in Shared Ownership dept. The lease usually contains a restriction on sub letting/getting a lodger so you would need to check. (unless you could get a friend so it's unofficial?)
We have found a surge in popularity during the credit crunch & could probably sell each property 4 times over.
The downside is that you have to ask permission for everything - from changing mortgage lender to get a better deal, to having a pet!
The plus side is that you get a property you probably couldn't afford otherwise, and because the rent is subsidised, it costs less than a mortgage for 100%

Son_of_a_beesting

lembert wrote: »

The downside is that you have to ask permission for everything - from changing mortgage lender to get a better deal, to having a pet!

Interesting I didnt know that. One of things that annoys me about renting is having to ask if you want to do anything. If we wanted to remodel the place would that normally be allowed? What about hanging a TV/Speakers on the wall?

Mini_Bear

things to bear in mind also are that banks will want to see you have held down a job for 6 months to 1 year before lending a mortgage.
also while you are young, housesharing in different parts of london (to get a feel for the areas) really can be very reasonable - my sister pays £500/mth all inclusive for a massive en-suite room in greenwich and walks 2 minutes to wrk (so no transport costs).
Although you will have a deposit you will still have stamp, solicitors fees and all the assorted buying costs. plus if you rented for the first couple years you would acquire furniture which is a massive expense when you buy your first house.
im not trying to discount buying, just that you are young and this will be your first proper job, when you buy a property you will be a lot less flexible to move and take opporunities if the firm wants you to.
Good luck whatever you decide OP

LadyLawyer

Hiya
These guys are all right in different ways. Shared ownership properties tend to come with a lot of restrictions including ones against subletting and certainly you cannot let without consent. The other difficulty you will have is that only certain mainstream lenders will lend on shared ownership properties (try Nationwide or Abbey) and remember you will be paying rent, mortgage and probably services charges as well. Plus your credit will need to be established, and I would agree that 3-6 months in a permanent job is a must.

SO properties are a great idea in principle, but there is a lot to think about. Your best bet maybe to contact a couple of the housing associations that deal with these properties.

Also if you are a keyworker, there may be certain advantages.

aaronoxf

I live in a 3 bedroom SO and in the first year had nothing but problems, not bad problems, just things going back and forth, now 2 years on everything is sorted and we couldnt be happier, now all the bills have started to fall meaning we have spare cash and are now looking into re-mortgaging