Shared ownership - will we have enough to live on?

hippey

My house is a shared ownership purchased 5 years ago. Very few issues except our rent went down this year! Do watch for those service charges as they catch people out.

zzzLazyDaisy

Is the a Housing Association shared ownership? If so you will have to pass their affordability criteria. So maybe that is a good place to start - it wouldn't commit you to buying, but at least you'd know if you would even get off the starting block.

Sosa

£420 pcm?! I wish. I live in South London, crappy 2 beds start from £750, council tax and bills on top.

This is all done through a housing association so yes we will have to go through various checks including a financial interview. I was told that they are usually satisfied if you have at least £100 left a month after all of the essentials.

zzzLazyDaisy

Sosa wrote: »

£420 pcm?! I wish. I live in South London, crappy 2 beds start from £750, council tax and bills on top.

It is worth checking to see if you would be entitled to LHA/CB on your current income if you were to move to a two bedroomed place.

gabyjane

Hi,

Ok we bought our newbuild almost 3 years ago and were in a similar position to you. We had loans etc and i was so stressed about the financial checks but we passed. They did say after our loans ended we would have had too higher income so we just got in at the right time. I am not sure of the limit though and gues it varies everywhere but ahould be easy enough to find out.

Our mortgage and rent is just over half of yours and we bought 40% and rent the rest, we have no service charge we are hoping to up it to 50% in August so it seems pretty high but i guess that depends where you live etc.

So long as you have the major bills covered and can cope ide say go for it. I ummed and ahhed as was scared of the commitment but tbh its one of the best moves we made. We were renting off a friend and although it was cheap i just wasnt settled and happy..we made the jump and are better off now due to the loans etc ending..the only thing we did look at was what if one of loses our jobs..would you still cope then?

Tbh rents just seem to get higher and i begrudge paying someone elses house off for them so again id'e say yes but make sure you have everything covered. If you need any more help with specifics just pm me

Good luck x

thatsean

Not a whole lot to add here, but on your mortgage offer it should tell you how much your repayments will go up by each 1% the interest rates do. I'd 'stress test' your budget, at 2,5,7,9% over your current rate and see what happens - that will give you comfort for the short/medium term that this is affordable, in some likely, and probably unlikely rate scenarios.

Also, how about contingencies for car/appliance breakdowns and saving for birthdays etc..? Also, no critical illness/income protection insurance there either? Worth looking at, as your budget doesn't need much to go wrong to throw it out badly.

Best of luck.

S.

gabyjane

I agree with above..we have illness cover, in the event of death etc so if one of us dies the house will be paid off etc.

woody01

The problem with shared ownership property is that the area always end up very 'council'.
You get your normal local authority dweller suddenly realise they may be able to afford a few bricks, and all of a sudden all the SO houses are full of ex-council tenants.

gabyjane

woody01 wrote: »

The problem with shared ownership property is that the area always end up very 'council'.
You get your normal local authority dweller suddenly realise they may be able to afford a few bricks, and all of a sudden all the SO houses are full of ex-council tenants.

Hmm not where i live! there are council houses but i'm guessing with them being in council houses that they can't afford S/O so that's where they are now? Our development is a min of 40% anyway so still not totally affordable for some and also the S/O houses were all reserved before they were even completed so i will have prob moved before i have to start worrying!

Sosa

This is South London, it's pretty much one big council estate anyway - believe me the area is not going to be any worse than where I am now. I'm still happy living in this part of the city though.

I have decided to go for it, thank you for all your advice, you guys have given me a few more things to consider. I just think that this could be a really good opportunity for us and if we don't do it I think we will regret it.