Shared ownership mortgage, poor credit history

gabyjane

justabitskint wrote: »

I'm aware of the pitfalls, sadly the rental and property market where I am is pretty horrendous, unless I earn £40k+ a year I can't buy anywhere worth buying and rental prices are equally ridiculous. Shared ownership properties in the locality do still sell although the sale process itself can take a little longer, locally it's an easier and popular way to get in. I could buy a place on s/o for less than it would cost to rent the equivalent privately.

It's not ideal but the best available option at present, developing a mortgage history should also stand me in good stead for the future.

Hi we were the same as you and tbh after mondays conversation with our ifa would now struggle to buy this house as it has increased a lot at the mo..so much for affordable hey! If we walked away tomorrow after selling it we would pocket around £18k towards another deposit if required ..i know we wouldn't have saved that ourselves and it has been far cheaper than renting so glad we did it when we did.

gabyjane

property.advert wrote: »

I can only advise to avoid shared ownership. I live in one, rented from the landlord but I know what the numbers are and the rent charged on the portion you do not own is way too high. There are also issues over the valuation as you need to know who would buy it from you and could they own 100%. Finally, it has to be valued akin to a council house as that is the market it is in. If new build, it will almost certainly be well overpriced. Avoid.

Again disagree! ours was valued at £153k when we bought it getting on for 3 years ago, next week we get it valued and it is going to come in at around the £180k mark (had 2 done a couple of doors up and they are identical but not semi detatched like ours so they reckon higher but that figure is good enough for the mortgage deal we have just redone. Not bad going really for a new build.

gabyjane

justabitskint wrote: »

The problem I have is that a private rent of a 1 bed flat in a half decent area is £600+ a month, before bills and at present the amount for a shared ownership is nearly £100 less. Circa £500 a month would get me a studio hovel in an area I'd need a stab vest.

It's a horrible catch 22 but for a single person on not massive money in the south east the options aren't great. Everyone needs shelter.

We had cheap rent before we bought this but they are now in the region of £700 per month if you are lucky for not great houses. We will pay in a few months £400 for the whole house inc rent now we have had our mortgage redone so very pleased with ours. There is no way we would get rent that cheap.

gabyjane

SouthCoast wrote: »

I live in a low wage economy and nobody can actually afford to buy the shared ownership affordable housing. Some of the properties have been on the market for a couple of years and others have been let out.

This i guess is the bad side to ours going up so much..whereas there is a waiting list for S/O where we live the price tag on ours now makes it no different to some other houses whereas when we bought it, it was a very nice house for the money. It still is a very nice house just more than i think most can afford for an 'affordable' house! Good job we don't want to move!

brit1234

gabyjane wrote: »

Ours has gained £30k in less than 3 years

Yes I admit prices went up when interest rates were dropped to 0.5%, government bought banks dodgy mortgage portfolios and mass funded rip off schemes such as shared ownership.

However you will also notice that house prices are now falling again, stimulas for dodgy schemes is removed or soon to be removed. Bank of England members are also now starting to vote for rate increases.

You may brag about your £30,000 price increase but I need to ask you one question. What have you done personally to add £30,000 value to it? I suspect not much and £30,000 can't be attributed to basic inflation. To add value to a property it usally has to have an extention, basement/loft conversion, maybe a consevatry or do it up from neglect. So in reality you have an unsustaianble value of about £26,000 which could be wiped off imediately considering the home wasn't overvalued in the first place.

gabyjane

brit1234 wrote: »

Yes I admit prices went up when interest rates were dropped to 0.5%, government bought banks dodgy mortgage portfolios and mass funded rip off schemes such as shared ownership.

However you will also notice that house prices are now falling again, stimulas for dodgy schemes is removed or soon to be removed. Bank of England members are also now starting to vote for rate increases.

You may brag about your £30,000 price increase but I need to ask you one question. What have you done personally to add £30,000 value to it? I suspect not much and £30,000 can't be attributed to basic inflation. To add value to a property it usally has to have an extention, basement/loft conversion, maybe a consevatry or do it up from neglect. So in reality you have an unsustaianble value of about £26,000 which could be wiped off imediately considering the home wasn't overvalued in the first place.

Hi, I wasn't 'bragging' about it i was pointing out the fact that not all housing scheme houses and new builds are piles of sh*t?? I get sick of the people moaning about them due to some tv programmes that tar them all with the same brush.
No we haven't done a great deal with the house and no it wasn't undervalued..tbh it could have been valued at a lot less for all i care either way we would have done well BUT we are not moving so again the price increase is not relevant. IF we moved tomorrow we would do well out if it was all i was saying as opposed to renting.

justabitskint

Kind of update:

Had a chat with my ifa neighbour today, looked in to a few things, made me aware of a few things to do with S/O mortgages. Essentially because of my shoddy credit record, 772 on experian with 1 ccj, I am probably going to struggle due to the cagey nature of the market at the moment. We're going to test the water by looking for an agreement in principle and see how that goes, I'll admit I'm not too confident but you've got to try right?

Incidentally, what I didn't know was that a number of lenders will take a total of rent on a S/O property and subtract that from your wage to work out what they will lend you. It makes sense now I know but perhaps something to take in to account.

justabitskint

No agreement in principle due to credit history

Not sure what I can do to repair it but I may just have to wait years until it comes off of my file, I'm doomed to rent and spend masses more money now.