New to Shared Ownership in London - My experiences

Julis7239

Hello Everyone,

I know this is a popular thread topic, but having looked through many SO posts, I see about 90% of responses seem to be from people who have not had any experiences of Shared Ownership schemes which for me and I imagine others is not very helpful...

I wanted to write this regarding the following situition (my current sitution) and welcome your thoughts - especially from those in a simliar situ or have been in a simliar situ or are knowledgeable about it:

Why renting now sucks
a). I live in London and currently pay over £1200 in rent (plus bills) for a 2 bed property which is a bit run down. OUr LL also comes round once a week to pick up her post unannounced and although this breaks our contract keeps ignoring our privacy and turning up announced. This is one experience in a long line of many renting/house share nightmares I have had living in London. The flat we are renting is valued at about 310K...Normally flats in the area go for rent at about 300pw. Im 31 and feel a bit too old to be putting up with this type of thing yet can not buy outright

Why Im considering SO
b) a 2 bed property within 5 minutes of where i currently live has come available through SO. Its a new build in a regeneration area - within 500m of a tube. If I buy 50% and rent the rest with a 20% deposit + management fees it works out at just under 1000pcm. I have saved a 20% deposit and am on circa 45K but will not be lent more than 160k in the current climate for any purchases

SO Mortgages - your experiences at the moment
I have been really disappointed to learn most lenders a) are put off by new builds b) really not wanting to lend on SO and having spoken to L&C for advice they only found 2 potential lenders!! At 6.5% and above (non-SO people this seems normal!) Has anyone else experienced this? Initially I quoted 60% share and 15% deposit and I am going to change it to 50% share 20% deposit - does anyone know whether I should expect a lower rate?

Also - should I go with the housing association solicitors? I do not know anyone who can recommend anyone to me...

Thanks in advance

poppy10_2

Julis7239 wrote: »

b) a 2 bed property within 5 minutes of where i currently live has come available through SO. Its a new build in a regeneration area - within 500m of a tube. If I buy 50% and rent the rest with a 20% deposit + management fees it works out at just under 1000pcm.

How much does the house cost? What is the breakdown of the monthly payments in terms of rent and mortgage payments?

robin_banks

Julis7239 wrote: »

Hello Everyone,

I know this is a popular thread topic, but having looked through many SO posts, I see about 90% of responses seem to be from people who have not had any experiences of Shared Ownership schemes which for me and I imagine others is not very helpful...

I wanted to write this regarding the following situition (my current sitution) and welcome your thoughts - especially from those in a simliar situ or have been in a simliar situ or are knowledgeable about it:

Why renting now sucks
a). I live in London and currently pay over £1200 in rent (plus bills) for a 2 bed property which is a bit run down. OUr LL also comes round once a week to pick up her post unannounced and although this breaks our contract keeps ignoring our privacy and turning up announced. This is one experience in a long line of many renting/house share nightmares I have had living in London. The flat we are renting is valued at about 310K...Normally flats in the area go for rent at about 300pw. Im 31 and feel a bit too old to be putting up with this type of thing yet can not buy outright

Why Im considering SO
b) a 2 bed property within 5 minutes of where i currently live has come available through SO. Its a new build in a regeneration area - within 500m of a tube. If I buy 50% and rent the rest with a 20% deposit + management fees it works out at just under 1000pcm. I have saved a 20% deposit and am on circa 45K but will not be lent more than 160k in the current climate for any purchases

SO Mortgages - your experiences at the moment
I have been really disappointed to learn most lenders a) are put off by new builds b) really not wanting to lend on SO and having spoken to L&C for advice they only found 2 potential lenders!! At 6.5% and above (non-SO people this seems normal!) Has anyone else experienced this? Initially I quoted 60% share and 15% deposit and I am going to change it to 50% share 20% deposit - does anyone know whether I should expect a lower rate?

Also - should I go with the housing association solicitors? I do not know anyone who can recommend anyone to me...

Thanks in advance

You're a single guy, you meet the woman of your dreams have kids etc....

You'll have one hell of a problem selling it.

Mandog

Hi Julis7239


My feeling is that if you buy a desirable flat in a good location it's worth considering. You've obviously done your sums carefully.

But those mortgage rates are shocking! I can't advise but maybe someone else can.

Of course S/O does have major disadvantages - the main ones I've found are not being able to rent it out and having to deal with an incompetent and unprofessional housing association. But any leaseholder can be a pain in the butt and they're certainly no worse than your dreadful landlord!

I'm not sure why it would be massively more difficult to sell than anything else. My housing association gets 2 months to sell to a S/O buyer and after that I'm free to put 100% of it on the open market. People on here desperate to sell S/O are in a bad situation because they can't rent like so many other homeowners are doing at this rather stagnant time.

I considered either selling or stretching myself to the limit by staircasing to 100% recently then, after some research, decided to do neither. It's in zone 1 and the rent on part I don't own is well below the market rate (and tied to RPI so can't go up much beyond inflation); it's also less than the interest element of the mortgage I'd need to buy it.

I'm now focusing on paying off the mortgage on the other half as quickly as possible - then it will be a place I can live in very cheaply. I'm on a middling public sector salary and if I'd had to buy outright it would have been much further out and several years later.

BexInLondon

We got 4.88% from Nationwide but that was with a 25% deposit. There was no arrangement fee but we did have to pay for the valuation.

Are you using a broker who is used to SO?

Oh and yes, I agree that a lot of the criticism comes from people who haven't actually experienced SO. Anyone who goes into it should know the facts fully (particularly the constraints on selling it on) but as long as you do, it's a great option in London.