shared ownership (new build homebuy) help help!

blue2181

Hi Guys,

Apologies in advace for such a long note.

I am a FTB and looking at various options with money i have got, SO seems a good affordable idea, but I have been reading lots of negative stuff about shared ownership and most comments I came across were fairly old (posted atleast a yr ago) so thought to ask the question once again as the market has considerably changed..

My idea is to get a small SO property in nw london, and mortgage below the range of what i can currently borrow/afford (I am not stretching myself to buy something that i can not realistically afford), cost including mortgage repayment for my share + 3% rent on HA owned part + service charge would be about 15%-20% cheaper then my current rent, I have 15K saving and can hopefully save another 10-15k in next 3-4 yrs and then sale my SO flat and buy on open market.

or either buy remaining share in SO flat in future and then sell it (since lots of negative comments were related to selling when you only own a share of the property). If property prices improve, when i sell i may be able to cover my cost, not looking to make a profit.

So this is definetly not a looong term house, may be for 5 yrs, Do you think this strategy would work!

Also any experice of Stadium housing group!

Also if it helps advising, it is a new build apartment, 7 story block with half of the flats already sold to non SO buyers, prices of SO flats are actually 10% cheaper but that is probably because they come with no parking as compared to open market/non SO flats in same building.

ps.
I would love to be able to buy on open market but with money i got, very very slim chances of finding a flat that i like, in my budget and even though i will hv only 10% deposite so interest rates will be really really high.

Thanks for any comments or advice...

BexInLondon

Your plan sounds very like ours. I think a lot depends on your housing association, and how good they are, as there are some horror stories out there. Coming to the end of our first year, our HA have frozen the rent and dropped our service charge so they're not all bad. I have a lot of friends in Shared Ownership and don't know of any horror stories at all, however there are a few on here. I think given that you're not looking to make a profit it doesn't sound like a bad idea at all (but then I would say that as my idea is the same!). Like you, our total outgoings on mortgage, rent and service charge are cheaper than rent would be for an equivalent property (in our case by about 40%), and to be honest, for most normal FTBs in London at the moment SO seems to be the only option without the possibility of assistance from a limitless Bank of Mum and Dad.

This thread will probably soon be overwhelmed with cries that SO is ruining the housing market by pumping up prices artificially, but you're not the housing marker, you're you! You can't shoulder the weight of the whole market, nor should you!

Good luck with it.

Fire_Fox

Historically housing is a good investment medium to long term, three to four years is short term so it's not an investment it is a gamble.

getmore4less

Some people seem to be having problems due to the HA vetting the buyers.

Make sure you have total control and can sell to anyone.


The other problem is the SO trap, price rises and falls are not the way out of SO.

You have to have a plan that means saving/paying more at some point so no good for anyone on flat salaries unleys they plan to stay a long time.

brit1234

I'm in the anti shared ownership group and have seen my friends problems. Keep well away if I was you, you are in danger of being trapped as prices start coming down again.

Far better to enjoy the price falls and save a deposit,

Check the other posts to see how dodgy these schemes are.

blue2181

getmore4less wrote: »

Some people seem to be having problems due to the HA vetting the buyers.

Make sure you have total control and can sell to anyone.


The other problem is the SO trap, price rises and falls are not the way out of SO.

You have to have a plan that means saving/paying more at some point so no good for anyone on flat salaries unleys they plan to stay a long time.

Thanks, our plan is to get a fixed mortgage deal for 3 yrs and then to remortgate to buy 100% and then if all is well then in 5 yr we sale and move...we hv factored in another couple yrs in case we can't save enough or price has gone up/down real bad..

we can keep renting for another few yrs till we hv bigger deposite but if we go SO it will be little quicker to gather deposite as atleast some part of what we will be paying will go towards pricipal and we will be paying less then renting..

also we are not borrowing to our maximum monthly payment capacity...so as long as we are employed we will still hv some room to manuevor..we are only buying 40% share even though we can afford 75%..(thats another question...how much share to buy!)

also property is in nw london 1 bed flat priced closed to £165k so even if market goes down i don't suppose it will go down by 20-25%..at which point it will make some serious difference...

also other pitfalls mentioned with SO were service charge/rent...i suppose service charge can be a problem with any apartment..so or non so..depending wht kinda neighbours/management compny you got....and rent is 3% at the moment...even if they put it up...it will still be around same as mortgage interest rates..if not less...

only outstanding worry now is...if stadium housing..which is HA for this property will house some nasty social tenants...!

Cannon_Fodder

check the small print to see if you can rent it out. if your job moves, you might need to.

blue2181

Cannon_Fodder wrote: »

check the small print to see if you can rent it out. if your job moves, you might need to.

Cheers, preparing a list of things that i need to check with the lease, hopefully lawyers would check it too if i decide to go ahead...awaiting copy of the lease but marketing agents are kinda slow or may be HA is slow..!

Any clues on where can i find out some feed back abt stadium housing...! also any experience on how easy/difficult would it be to sell back to HA ...just in case...