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Shared ownership - something to look at if you "own" one
Comments
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Sounds like a normal leashold properies just the rents are bigger because you pay less up front.
If you can't afford a full house then why take on the responsiblities of ownership and still pay rent CRAZY.0 -
They would rather pay their own mortgage than someone elses.
Now is the time to get on the property ladder while they have no children, if they rent it will start eating into their mortgage deposit money & they certainly won't save much while lining the landlords pockets.
I have said before you need a plan to get out of of SO
These are the only 2 that work
You can afford a place but it's cheaper to do SO.
You will get an increase in income or a windfall so you can afford a full place.
If your kids don't have either of the above then you as a parent are neglegent supporting any SO purchase unless you have another plan for them to become full home owners.0 -
Don't buy a shared ownership property as it isn't shared ownership. With some of the schemes even if you pay for the rest of the shares in the property it is still leasehold and you have to pay service charge, plus there are conditions on how you sell it. You may as well buy a flat that is leasehold if a house isn't affordable.0
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even though i dont understand the op, i wouldnt never have touched them with a barge pole, total rip off and undesirable0
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Apparently, nearly 1 in 100 households in England has a shared ownership lease. It therefore follows that 1 in 100 households are in for a very nasty shock, when they discover that they do not necessarily own a share of the property!
The idea, of course, is simple. The householder pays the registered social L a capital sum equal to half of what it would have cost to buy the property outright; L then grants the householder a long lease (usually 99 years), with the rent being half of what it would have been in the open market. But, the problems arise if T falls into arrears of rent and L then brings possession proceedings:
1) If there are two months of rent arrears at the date of the hearing, the court cannot refuse a possession order. Once a possession order has been made, T has no right to pay off the debt so as to salvage the situation.
2) L can then retain 100% of the property (ie L takes over T’s 50%, or more, investment).
As a note in the NLJ puts it, the householder was not, it seems, the owner of a half-share in the property; indeed, in that situation there will have been no shared ownership at all. What the householder owns is the lease and nothing else – and once the lease has gone (when possession is given to L) then that is the end of the householder’s stake in the property. Thus, once rent arrears have accrued, T only has a short window of opportunity to pay off the debt or otherwise lose the whole investment.
A case is then given with the upshot being:
The 50% capital payment made on purchase had not bought her a half share in the property, it had merely bought her the lease – and nothing else.
Is this the case for all shared ownership or just certain types?
How else are you going to share ownership in a way that allows mortgage lenders to lend? I haven't seen a shared ownership that isn't done by granting a lease. In reality this kind of case wouldn't normally happen because the mortgage lender would pay off the arrears and add it to its security.
There are problems with shared ownership often associated with the inflated prices that HAs use as their original valuations on which to base the shares sold to first buyers and the problems of raising finance to buy further shares when the property has gone down in value - more difficult than you think because a lender bases its LTV criteria on the total amount loaned (including the original loan) as a proportion of the total value of the share when the loan is made. E.g. property initially valued at £200K. 50% share £100K. Buyer gets 100% mortgage - even big mainstream lenders were doing these on SO property until about 3 yaers ago. Property now worth £170K. To purchase another 50% will cost £85K. Maximum lender will lend in total is their current LTV maximum for SO - say 90% of £170K is £153K, but £100 already borrowed so only get another £53K which is £32K short!
The fact that they are leasehold in my view is an inevitable consequence of the property being SO, but there are other issues with them.RICHARD WEBSTER
As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.0 -
My DD & her DF are looking into buying a shared ownership home as they only way a young couple can get on the property ladder in Surrey:mad:
I just bought in Surrey with my boyfriend and we are 23! It is possible to do it without the schemes but I had to lower expectations if I wanted to stay in Surrey e.g. Flat instead of a house.
Isn't it better to make little sacrifices if you are desperate for your own place rather than buy half a house? Or just a lease as it appears!"It would be so nice if something made sense for a change" ~ Alice in Wonderland0 -
Shared ownership is not a nightmare, it's a godsend... as long as the people going through the process understand what they are doing.
I'm going shared equity on a freehold property, newbuild, with 10 years to pay back the developers for their 20% share. The easiest way to look at it is that the developers are paying the deposit, and we have 10 years, 5 years of which is interest free to pay them back... but we get the house now.
It's not all doom and gloom.
All this LTV stuff as well... it's only a problem if you're trying to make a quick buck on your house, or NEED to move. If you're okay where you are... then so what?!MFW 2010- £112,500 + 20% Equity Loan = £150,000 35 years
2013- £108,877.28 + 20% / current OP = 19 years :T
Target to be Shared Equity Free- 2016Target for holiday to Australia- 2014Currently training for a Commando Challenge- drop and give me 200 -
Shared ownership is not a nightmare, it's a godsend... as long as the people going through the process understand what they are doing.
I'm going shared equity on a freehold property, newbuild, with 10 years to pay back the developers for their 20% share. The easiest way to look at it is that the developers are paying the deposit, and we have 10 years, 5 years of which is interest free to pay them back... but we get the house now.
It's not all doom and gloom.
All this LTV stuff as well... it's only a problem if you're trying to make a quick buck on your house, or NEED to move. If you're okay where you are... then so what?!Don't Panic - and carry a towel
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getmore4less wrote: »I have said before you need a plan to get out of of SO
These are the only 2 that work
You can afford a place but it's cheaper to do SO.
You will get an increase in income or a windfall so you can afford a full place.
If your kids don't have either of the above then you as a parent are neglegent supporting any SO purchase unless you have another plan for them to become full home owners.
My DD is doing a business degree & her earnings should rise considerably in a couple of years time.0 -
I just bought in Surrey with my boyfriend and we are 23! It is possible to do it without the schemes but I had to lower expectations if I wanted to stay in Surrey e.g. Flat instead of a house.
Isn't it better to make little sacrifices if you are desperate for your own place rather than buy half a house? Or just a lease as it appears!
They are only on about 20 each at the moment.
Don't think that will get them much.
I guess you earn a bit more.0
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