Shared Ownership Property?

milliebear00001

Hi there

We are thinking of buying a shared ownership property which has come onto the market nearby. The house is not new, and the current vendors bought it from the housing association at %50 equity share - it is this share that is now up for resale.

I realise we will have to pay rental and servie charge on top of the mortgage, but are there any other major pitfalls to this? The property comes with the option of buying further share later.

What issues do I need to be aware of? Also, would I need to approach a specialist lender/broker re. getting a mortgage?

Thanks

brit1234

Three main issues
1, There are hardly any lenders who support the scheme
2, These properties are extremely difficult to sell later, I have a number of friends having big problems selling at the moment as hardly anyone wants this scheme
3, There are oftern lots of addition restrictions on these properties compaired with normal ones.

I personally would stay well clear.

dmg24

brit1234 does not appear capable of presenting a balanced view of shared ownership, there are both negatives and positives to SO.

If you do a search you will find lots of threads on the topic.

mrsmcfly

I used to live in a shared ownership property. At that time Abbey did the mortgage for it, so that would be worth investigating. I would say that if you are able to buy the extra shares then go for it. With the one we had we could buy it in increments of 5 or 10% after the first years then the additional share after that.

Good luck

Richard_Webster

usually you can only buy a 50% share if you are on the HA's list of nominees. it is only if they have nobody interested that people not on their list can generally buy.

Most major national lenders will lend on SO property.

mumcoll

As I replied on a similar thread, we had a shared ownership property a long time ago and it gave us the step on the housing ladder that we wouldn't otherwise have had. Less than a year later we had enough equity to put down a deposit on a 100% purchase of another house. We were only in the house briefly but sold with no problems to another young couple on the same basis. (They went on to purchase the other 50%).

Our mortgage was with Nationwide. As I say, it was a long time ago but if any of my children needed to do it I would definitely advise them to investigate it further.

brit1234

dmg24 wrote: »

brit1234 does not appear capable of presenting a balanced view of shared ownership, there are both negatives and positives to SO.

If you do a search you will find lots of threads on the topic.

Can you give the positives then?

milliebear00001

Thanks for all your advice. I am guessing a whole of market broker should be abe to advise which lenders will consider SO properties.

The house is on an extremely popular estate, is just what we are looking for etc. When the last poster says usually only people on HA lists are eligible - what does that mean? This property is being advertised on the open market via an ordinary local estate agent. I am a key worker if that makes any difference, and although we could only afford around 50%now, because of my salary increase structure, I am likely to be able to staircase in the nearish future.

Full value estimated at £167,000. I would need to borrow approximately £55,000 on a £23,000 salary.

brit1234- what sort of extra restrictions are likely to be an issue?

CLAPTON

some issue

who determines the value of the property when you want to sell
who determines the value of extra shares if you want to buy more
does the 'rent' vary or is it fixed

brit1234

milliebear00001 wrote: »

brit1234- what sort of extra restrictions are likely to be an issue?

Restrictions on sales, you can't sell straight off, you have to sell to some one they recommend, if no one appears you can put it on the market like normal. However they control the valuation and have to use their surveyors. It removes flexability and puts your property higher than others reducing interest.

Your elegible for all the maintance costs while owning a fraction of the property. Then there are conditions on decorations, parking (another £10k) and oftern pets.

I have looked at these deals and have been completly put off by the experiences of friends.