Shared ownership - something to look at if you "own" one

robin_banks

MrsE wrote: »

I thought the idea of shared ownership was you bought as large a % as pos & bought more as you could until you got to 100%.

I don't have a fixation with Surrey at all, I'm just pointing out that the regular housing ladder is very difficult for people to get onto if they are tied to areas with high house prices (by work &/or family), I can only speak of what I know & Surrey is where we live.

Only 3% of those who buy SO stairgate, i.e. buy additional percentages.

robin_banks

woody01 wrote: »

Perhaps so, as a degree these days, unless from a good uni, amd with a high mark, isn't worth the paper its written on.

Being a graduate is no longer a sign of intelligence.

I'm not convinced it ever was, I've got an MSc for example and I don't consider myself to be that bright.

ztan

Salz wrote: »

So what happens in 5/10 years? Do you add that 20% to your existing mortgage?

You can remortgage in stages, or pay off lump sums.

Look at it this way: (Shared Equity that is)
A house is for sale at £165,000.
You put in an offer for £150,000. House is valued as such.

You get a mortgage for £112,500, with a deposit making your share up to £120,000. The developer agree to pay £30,000. (80/20)

You get a house, you get a mortgage which you would never be able to afford otherwise. You then save up really hard, and be sensible, and chuck a wad of cash each year in an ISA.
You overpay as much as is humanly possible on your mortgage.

In 5 years, before interest kicks in, you remortgage the house, for what your mortgage is after overpayments + 20% of the value of the property. (Regardless of whether it is LESS or MORE)

or, you continue overpaying, pay 1% + the % increase in RPI from the previous year as interest on the "loan", and then remortgage when the time is right.

Now yeah, it isn't SIMPLE... but it works IF (big IF) you're sensible and you plan it as much as you can.

If you go Shared Equity, or Shared Ownership or whatever and just pay the minimal amount... then you're in trouble.

I agree, part mortgage, part rent schemes scream TROUBLE to me, but more and more scheme's are shared equity which can be and is a good thing.

Also, someone said- circumstances and needs change. Well, if you think in 5-10 years you're going to be downsizing, upsizing, moving etc.. then you need to think about what property you're buying in the first place.

Forward planning goes a long way. Buying a 1 bedroom flat, when in 3 years it's likely you'll have a kid, or want a garden, is stupid.

Anyway enough from me. I'm in the under 25 first time buyer bracket. Maybe Falsely Optimistic But Happy

Snuggles

I know shared ownersip/equity schemes always come in for a lot of criticism on here, but just wanted to say, not all of these schemes are the same.

I bought a shared equity property four years ago. It's leasehold, and I bought a 60% share, a housing assocation owns the remaining 40% of the equity. I do not pay any rent on the share I don't own. Apart from my mortgage, my only other cost is a nominal ground rent of £20 per month, which is fixed, and will not go up. There are no service charges. I don't have the option to buy the other share, but why would I want to? It makes no difference to me that the HA owns a 40% share, as I'm not paying them rent on it.

This has enabled me to buy a property in my home village, which I would never have been able to do without this scheme, and I'm very happy with it.

getmore4less

MrsE wrote: »

My DD is doing a business degree & her earnings should rise considerably in a couple of years time.

But the chances are that she will have no idea where this well paid job will be, so tieing into a property that could be difficult to sell and have restriction on renting it out is not sensible and a reason NOT to buy anything never mind a SO property.

Wait till the income job situation is sorted, job hunting you need to be a flexable as possible.

I hope you are funding a decent UNI and one of these seccond rate places.

I did a lot of recruitement for IT places and we had to stop looking at people from the second tier they just were not upto scratch.

Svenena

MrsE wrote: »

She & we have/are funding it, she hasn't got a loan.

If my parents had a spare £20K to give me, I'd rather have taken the student loan, and had that money towards a future deposit for a non-SO house.

LittleMissAspie

MrsE wrote: »

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.

A previous post sounded like they are both living at home? I earn about 20k and rent privately in an expensive area of the country, and have saved 50% of my take home pay for the last few years to get our deposit. They can save 50k in just two years living at home on those salaries. That and some bargaining will get them the average starter home that Becca mentions.

I do hope that prices drop as that will help them out even more. It's very difficult and it's certainly more difficult that it was for our parents and I'm glad you realise that rather than spouting the same old "it was hard in my day". But it is possible without resorting to these dodgy schemes.

ztan

Just make you they understand the full t&c's of the SO scheme.

If they have to pay part rent, and never get to buy back the non mortgaged part, then avoid.

A lot people on here have very negative attitudes towards, well almost everything, so don't take all this critcism to heart. If it looks like a good offer, and everyone involved knows what they're potentially letting themselves in for, then best of luck to you!

Bullfighter

MrsE wrote: »

I know its a last resort, but in Surrey its almost impossible for them to buy somewhere outright:(

We live in Surrey, it's one of the Baby Boomer strongholds.

Why would your kids want to saddle themselves with massive debt to 'buy' half a home (I bet in not the best part of Surrey)?? A house your generation would have been able to buy with a 3x mortgage, a 1/2 annual salary deposit... on one 'average' salary??

Forget the property ladder, it is nothing more than a ponzi scheme. They are the last to get on, they will lose the most.

Tell them to save their money and rent.

MrsE_2

robin_banks wrote: »

Assuming of course she gets a job. Not meant as dig btw.

She has one. NHS corporate:D
She's doing the degree part time;)