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New Buyers Housing Association Search!

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  • MortgageMamma
    MortgageMamma Posts: 6,686 Forumite
    First Post First Anniversary Combo Breaker
    Yes but if you could take an Mortgage Payment Protection Policy or Permanent Health Insurance policy this should not be a problem as your mortgage would be paid for you upon a sucessful claim...
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • I work for a local authority and amongst my responsibilities I develop large amounts of shared ownership homes, the large majority of which are provided without any public subsidy but rather through Planning deals with private developers. The major key to the affordability is the percentage of rent charged on the unpurchased part. The government has set an upper limit of 2.75% for projects it funds meaning on a 3 bed property valued at £150,000 you would end up paying about £172 per month on top of any mortgage payment of around £475. In this area the private rent would be at the lowest level only about £50-75 below this. For this you get a 50% stake in a brand new property.

    What I focus on is driving down the rent on the unsold part of the house price. The latest deal I have arranged is that will be set at 1% meaning the rent above would drop to £62, a total monthly cost of £540. This is below the level of private renting and most people believe is a good deal for them compared to trying to save up whilst living in private rented accommodation you can be turfed out of with just 2 months notice.

    The trick is to work with the right housing associations who share the understanding of what it is like to struggle onto the housing ladder and who will therefore stretch their financial appraisals to maximise affordability. Hence the tip as ever is to shop around and see what different associations have on offer. The new 'Zone Agents' will not have all the shared ownership homes available in your area - it will only deal with those that are directly funded from government, a flaw in the new system.

    Shared ownership is also limited to people who don't already own another property which in an area where investors and buy to let landlords are simply too powerful when 'starter homes' (that are also the ideal private rented home) come onto the market, is a vital feature for people trying to buy with limited resources.

    I disagree completely with the macro economic argument on new build shared ownership products. These are properties specifically constructed for this purpose so there is no question of increasing money supply and hence having an inflationary effect. I see the argument for the equity loans on offer and believe that these funds should be targeted to increasing supply not demand.

    The real issue is the suspicion this is viewed with by many people when, unfortunately, it is many working people's only realistic chance of getting on the property ladder, an aspiration for the vast majority of the population, unless they are fortunate enough to have parents wealthy enough to give them a leg up. Anyway, I've rambled on far too long now!
  • MortgageMamma
    MortgageMamma Posts: 6,686 Forumite
    First Post First Anniversary Combo Breaker
    Hi Wearwolves

    Thanks for the insight into the funding of shared ownership properties, that was really useful.
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Question for the mortgage experts on here: how affordable would one of these properties actually be? Followed the link and can't find anything suitable in my area (I'd need 3 bedrooms to make it viable long-term) for under £250k. So with shared ownership, what would a £250k property actually cost in terms of deposit and monthly payments?
  • Bargain_Rzl
    Bargain_Rzl Posts: 6,254 Forumite
    I work for a local authority and amongst my responsibilities I develop large amounts of shared ownership homes, the large majority of which are provided without any public subsidy but rather through Planning deals with private developers. The major key to the affordability is the percentage of rent charged on the unpurchased part. The government has set an upper limit of 2.75% for projects it funds meaning on a 3 bed property valued at £150,000 you would end up paying about £172 per month on top of any mortgage payment of around £475. In this area the private rent would be at the lowest level only about £50-75 below this. For this you get a 50% stake in a brand new property.
    I live in London and am in the process of buying an SO property with a 40% buy/60% rent split ... It is not publicly funded and the rental element is set at 3% ... When the mortgage, rent and insurance are all added together, they come to significantly LESS than either buying OR renting outright ... In fact you can throw in the service charge and STILL come up with a lower figure than I had thought I would have to pay on the open market for a small studio in need of work (for which I'd have had to continue to save nearly half my salary for at least the next six months) ... Instead I am getting a brand-new, nicely-finished one-bedroom flat which is near enough to my workplace to improve my current quality of life significantly ... I'm not looking for an investment (I'm single and likely to remain so, no dependants, can't take it with you) ... What I, and many others in my position, require is a HOME ... I've been living in shared houses and bedsits for the last 7 years and have periodically been forced to move on because of the circumstances of landlords/flatmates ... I disagree with the earlier point "Nobody wants half a house" ... Having equity in property is not especially important to me ... I just need somewhere to put down some permanent roots, a degree of protection from future rent rises (I'm also intending to overpay the mortgage from an early stage to minimise the effect of rent rises) ... and a place to call home that isn't the flea-pit I live in at the moment ... I know I'm biased but this seems to be the ideal solution for me - and TBH I wasn't even thinking about SO until this particular property presented itself ... Just my 2p worth :)
    :)Operation Get in Shape :)
    MURPHY'S NO MORE PIES CLUB MEMBER #124
  • Bargain_Rzl
    Bargain_Rzl Posts: 6,254 Forumite
    Sorry - edit to previous post (can't use the edit function due to tech problem on this PC which is also the reason I can't do paragraphs) ... Of course I meant "I'm also intending to overpay the mortgage from an early stage to minimise the effect of INTEREST RATE rises"
    :)Operation Get in Shape :)
    MURPHY'S NO MORE PIES CLUB MEMBER #124
  • MortgageMamma
    MortgageMamma Posts: 6,686 Forumite
    First Post First Anniversary Combo Breaker
    Question for the mortgage experts on here: how affordable would one of these properties actually be? Followed the link and can't find anything suitable in my area (I'd need 3 bedrooms to make it viable long-term) for under £250k. So with shared ownership, what would a £250k property actually cost in terms of deposit and monthly payments?

    How much the mrotgage would could would depend on the following factors.

    1. % of property being purchased
    2. HOw much, if any, deposit you have
    3. Your credit status, adverse credit always means higher mortgage rates
    4. The lender and product that is chosen, and whether there are many upfront fee's or they are all added to the loan
    5. Don't forget you will need buildings insurance, mortgage payment protection andif you have dependents life cover.
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • So buying 50% ownership that would be a mortgage for £125k (minus deposit), plus buildings insurance and mortgage protection (which obviously I don't need at the moment as I'm renting), plus the rent on the other 50% of the property.

    That's considerably more expensive than renting I reckon.
  • MortgageMamma
    MortgageMamma Posts: 6,686 Forumite
    First Post First Anniversary Combo Breaker
    So buying 50% ownership that would be a mortgage for £125k (minus deposit), plus buildings insurance and mortgage protection (which obviously I don't need at the moment as I'm renting), plus the rent on the other 50% of the property.

    That's considerably more expensive than renting I reckon.

    Depends on what/where/who you rent from. Look into it and see for yourself, thats the best way. The key is that you are actually OWNING part of what you buy, so you money is going to better use than 100% renting.
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Well the property I'm currently renting is roughly equivalent to the ones on the shared ownership website, apart from the fact that it isn't brand new. Doing some quick research and calculations the mortgage alone would be £100per month more than the rent I'm paying at the moment, based on a discounted rate so that would go up after a couple of years, then there are all the other costs on top. And that's assuming interest rates stay the same. All to buy a 50% share in a house that could, potentially, fall in value considerably in the next few years.

    I'm not criticising the system in itself - I'm sure there will be some people out there who will benefit from it and good luck to them - but for my particular situation the figures just don't add up.
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