anyone else see London Tonight programme with the girl who had bought 10%?

CB1979_2

not sure if already posted, but did anyone see it last night?

I only caught a bit of it and all i grasped was that she had "bought" 10% of the flat.

how exactly does this work?

is it that she owns 10%? then "rents" each month?

not meaning to start another house prices falling/rising debate, but to me to it seems that as long as banks/companies keep offering new types of product to "suit" the new FTBs then prices are gonna continue to rise.

now where's RHemmings

lynzpower

depends if its a company or a housing association

the least Ive seen rfor sale via a housing association is 20% though

CB1979_2

sorry pretty sure it was a Housing Association, I did try to do a quick search (am at work!) on the itv website, but damn that was hard work.

lynzpower

cant find anything either

10% seems excrutiatingly low.

I think 40 is about the lowest really ( which is what Ive got) for it to make ANY sense to do.

Ive seen 25% up mainly round here and I think that is very low indeed.

RHemmings

lynzpower wrote:

cant find anything either

10% seems excrutiatingly low.

I think 40 is about the lowest really ( which is what Ive got) for it to make ANY sense to do.

Ive seen 25% up mainly round here and I think that is very low indeed.

Can anyone please tell me what the point of buying 10% of a house is? Even if the price of the house does go up, you only get a tiny fraction of it, and you're more or less just as priced out as if you bought none. You lose the flexibility of renting, of being able to just disappear and go somewhere else once or twice a year. And even if the "rent" portion of the purchase is a low market rent, I've heard of the organisations putting the rents up. With part ownership, it's much harder to move out if your rent goes up than if you're a normal tenant.

If people are going for 10% deals, I think that says something about sentiment in this country, where people must be on "the property ladder" at all costs. Even if they aren't really on it. Did she seem very happy about "owning" a house? The psychology of this could be very interesting.

Debt_Free_Chick

RHemmings wrote:

Can anyone please tell me what the point of buying 10% of a house is? Even if the price of the house does go up, you only get a tiny fraction of it,

Because 10% of something is better than 100% of nothing?

RHemmings

Debt_Free_Chick wrote:

Because 10% of something is better than 100% of nothing?

Clever answer!

But buying a house is not just a positive step. In owning part of the house she tasks on risks and liabilities. If she can't pay the mortgage, she gets repossessed. I'm not sure how negative equity would work for such a small share, but I assume it's some sort of risk. She loses flexibility in her life. And I don't see the upside. Perhaps it's harder for her to be thrown out by a landlord, but if the rent increases to something she can't afford, as in the example I read about, then she's out anyhow. And if she's so poor that she can't afford more than 10%, then I would think this would be a real risk. Did she borrow for the 10%? Leaving herself exposed to increases in interest rates?

In looking at the benefits/drawbacks of owning 10% over renting, I just can't see the benefits outweighing the drawbacks. It just seems to be a psychology thing to me. Is that what you meant by your answer? DFC, have I interpreted your answer too seriously?

RHemmings

CB1979 wrote:

now where's RHemmings

I'm not sure why I would be a good person to comment on this? Particularly since I didn't see the program. Or were you expecting to be amused by my bearish take on the whole thing

Gorgeous_George

10% of the loss when markets crash is better than 100%.

10% of any rise is better than 0%.

I bet the solicitors fees are more than 10% and when they want to move, they'll have 10% to sell first.

Pointless IMHO.



GG

lynzpower

Having a shared ownership flat is actually much better than many on here think.

I am selling to rent, for a variety of reasons. I bought this SO flat with the intention of becoming a foster carer, which is something im unable to pursue at present. There would be no way in hell I could have afforded to rent a 2 bed flat on the hope that I would get accredited as a foster carer, shared ownership was significantly cheaper and more stable.

In fact even now, theres no way you could rent this flat for any less than a grand a month, if not 1200. And I pay £750.

RHemmings

lynzpower wrote:

Having a shared ownership flat is actually much better than many on here think.

I am selling to rent, for a variety of reasons. I bought this SO flat with the intention of becoming a foster carer, which is something im unable to pursue at present. There would be no way in hell I could have afforded to rent a 2 bed flat on the hope that I would get accredited as a foster carer, shared ownership was significantly cheaper and more stable.

In fact even now, theres no way you could rent this flat for any less than a grand a month, if not 1200. And I pay £750.

You make a very good point. Would you not be accredited as a foster carer if you rented 100%? If that's the case, then the percentage of the flat you buy looks a good investment to me because it enables your career. Did the woman on the TV program have similar reasons for buying such a small percentage?