My Shared Ownership story (success story...)

Eric1

Out,_Vile_Jelly wrote: »

London is saturated with ugly blocks of newbuild flats, and 1 beds are the hardest to shift. Glad to hear you're content for the moment, but the time may come when you need to move and find that you're competing with millions of other identikit apartments that their owners are desperate to get rid of. With the average age of a FTB increasing all the time, there is an ever diminishing market for this type of property. 1 beds have to be a bit special in London I think, for example the one I rent has a substantial private garden and original Victorian features.

In my area (SE) even 2 beds are hard to shift, because it seems there is no "property ladder" any more. FTBs like myself just have to wait and buy for long term, without even thinking about hopping up the "ladder".
Obviously there are some success stories like the OP's, but that's irrelevant for many. At the moment it's like a separate market for special people.

gabyjane

Eric1 wrote: »

In my area (SE) even 2 beds are hard to shift, because it seems there is no "property ladder" any more. FTBs like myself just have to wait and buy for long term, without even thinking about hopping up the "ladder".
Obviously there are some success stories like the OP's, but that's irrelevant for many. At the moment it's like a separate market for special people.

Is the highlighted bit aimed at people with S/O propertys? if so i don't quite know what you mean by special people? i am far from special!!

PasturesNew

gabyjane wrote: »

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Is the highlighted bit aimed at people with S/O propertys? if so i don't quite know what you mean by special people? i am far from special!!

Most SO schemes are for specific groups of people. e.g. "locally born/bred" "must have worked locally for X years, or be able to prove other local connection", "must be a key worker", "must be able to prove you cannot buy on the open market", "must earn at least £X", "must earn less than £X", "must be on the housing list (probably of some housing association you've not heard of before)".... and sometimes it just seems that one falls through the cracks of all schemes.

robin_banks

Wickedkitten wrote: »

The OP said in another thread that they bought the flat for 160k, and in a different thread said



If he's only got £425 a month to play with after bills but before food and everything else now, its going to take him forever to staircase even 10%, and even more so if the prices do rise as a result of the olympics

Staircasing for many is myth, only 3% do so.

Eric1

gabyjane wrote: »

[/B]

Is the highlighted bit aimed at people with S/O propertys? if so i don't quite know what you mean by special people? i am far from special!!

sorry, could be a wrong word.
In addition to what PasturesNew says, SO buyers tend to be young, no kids, no worries about school catchment and other details (which are important selling points, as they will probably realize later). That's why it is a separate market, with a limited number of buyers. But some may be lucky, some not.

TypeR

If I was to buy property (which I'm not going to) the last thing I would do is 'share' my equity with anyone.

Did your parents? Do any of your pears? Do any members of say Government?

What if the value of the flat falls? I bet the stake owned by the 3rd party is protected.

Shared ownership is a mugs game, I'm sorry to say.

sturgeon

Poppysarah, your name clearly rings a bell from reading this forum over a year ago when I was buying the property, you must have typed out 'shared ownership is a con' about, what, 5,000 times now?

My post clearly stated that this is benefitting me financially. I see that allegedly 3% staircase, however the amount of disposable income I'd have left over will make it very hard for me NOT to staircase. Of course, this is providing that I don't blow all that money every month, however as with everything restraint is required.

Also, the discussion about how your Uncle Susan wouldn't have bought 50% of a home in 1927 is totally irrelevant. Almost every first time buyer these days cannot afford to buy a home outright (as in, with a mortgage for the full property price). If the average salary is £26k or whatever it is, and house prices at £150-200k for something at least decent, it's impossible. Shared ownership exists as it at least offers a way for you to get some kind of footing on the property ladder. I'd rather be paying my mortgage for 50% of a home than 0% percent of someone elses home. My dad bought his home for £120k in the late 80's and 20 years later it was worth seven times that. House prices have increased absolutely hugely compared to salaries. Of course most people are going to have to save for 20 years or use shared ownership.

A bank would not lend me about 7 times my salary to get a mortgage for the whole property, clearly. So this allows me to still buy it and save up to buy the part I don't own, at my own pace. Some schemes may be a con-as I said, I do indeed think the offers in newspapers to buy only 25% of a property to pay £300-400 a month mortgage...and then about £500 a month 'rent' are a con. As for less the price of that 'rent' I'm paying my monthly mortgage with zero 'rent'. The First Time Buyer Initiative most certainly is not a con for the reasons outlined.

'Identikit' flats may be a reality, however I spent a long time making the decision where to buy and did a ton of research. For somewhere with the transport links that this place has, the underground station 60 seconds away, Stratford 12 minutes away with possibly the biggest ever development seen of an area in London including the new Westfield coming next year, there's certainly more interest to live here than another random flat in a less desirable location.

Blacksheep1979

sturgeon wrote: »

No, I clearly haven't paid an artifically increased price as I explained that out of about 80 flats on the development, I got one of the very best deals on mine. And they've been valued by my mortgage provider, the developer and a third party so clearly aren't overpriced. So if you're trying to say I paid too much for this property, that's entirely untrue. Not one other similar property in greater London have I found for a similar price. Unless you're saying that ALL properties have artificially high prices, then I can't agree.

I won't come back crying on the forum if it drops in value, partly as the fact I only have half the share means I pay back less if the value falls. Anyway, as discussed due to various factors I don't see that it will reduce in value, or at least due to those factors it should devalue less than another identikit appartment in a random location.

You've bought at one of the best prices 'on the development' - erm isn't this development shared ownership (or so you seem to imply)? What's the price of a comparable one bed flat elsewhere - I bet it's less...

gabyjane

Lol Sturgeon I echo your last post completely and couln't have worded it better myself!

Pastures new i agree with what you are saying..we have lived in our town for years both of us and that was a requirement. Dh is a key worker however that didnt do us any favours! We are near a couple of primary schools but a 15/20 min walk so not too near of which im grateful! We could prove we couldnt buy on the open market without struggling but the stupid thing was we had loans when we bought this so were eligable..the lady looked at all the figures and said come a year or whatever it was we wouldn't have been able to apply..we are lucky i guess we now have no debts and can easily afford it..good timing maybe.

Eric 1 as above we are a young..ish couple (31 & 39)! we have a dd but school is a fair way away anyway so wasnt a point for us but there are actually 2 near by..dd's secondary school will be a 10/15 min walk when she starts which is great. Maybe i'm a different thinker to some but i think everything through and didnt just take the house due to it being offered..we thought it through for a long time and almost backed out at one point as im scared stiff of debt and the thought of a mortage sacred me but im very glad we did.

I can imagine if we had bought a £150k house (which was/is the norm for where we live) on a full mortgage at around £800-£1000 per month we wouldnt be as happy as we are now and struggling and worrying each month like many of my friends do..not a life really imo.

Imp

Please ensure these shared ownership schemes are short term. As I said on my previous post, these are like shared appreciation mortgages. Check out what has happenned to people who took out these mortgages 20 years ago.

http://www.google.co.uk/search?hl=en&source=hp&q=shared+appreciation+mortgage&meta=&aq=0&aqi=g5g-m1&aql=&oq=shared+appreci&gs_rfai=

The differences between shared appreciation and shared ownership are interesting.

Shared appreciation - 25% of the value of the property as an interest free loan until you sell, in exchange for 75% of the increase in value.

Shared ownership - up to 50% of the value of the property is owned by the scheme on which you could pay rent. The other part is a loan on which you pay market rate interest. Up to 50% of the increase in the value of the property goes to the scheme when the property is sold, but there is the opportunity to buy back the remainder of the house while still owning it.