Shared ownership scams

Graham_Devon

Chris2685 wrote: »

Golden.

I just rang them and she actually said they have a premium on them because they are shared ownership.

The rent on the other 75% is £24 a week (so she said?? Seems rather low to me for £270,000 worth of a property!) which I guess would make it not too bad in terms of cost per month. The fact that you would eventually need to buy back the property at a vastly increased price would be a total no dealer though.
There is also a service charge on top, which she did not know off hand.

Sounds like total rubbish to me. A premium for an affordable home ownership option. Rediculous!

And this is the crux of the deal.

Rent only £96 a month (Service charge will be included in that), on a 100% mortgage, repayment at 5% would be £532 a month.

So £628 a month for a 2 bed with decent size garden and garage.

You can only ever get 90% max on SO's, so the monthly payment would actually be £574 a month.

Cheaper than renting. Which is ALWAYS the point thats always missed whenever the whole SO scam thing comes up.

Yes, it has all it's downsides, but find a better place for the equivalent payment per month, where you are at least building up some equity in the property and a secure tennure and you only need a deposit of 9k to get in.

It's always pointed out that it's expensive to buy the whole property. SO is not designed for you to buy the whole property and never has been. Most simply sell their share on.

Really2

Graham_Devon wrote: »

And this is the crux of the deal.

Rent only £96 a month (Service charge will be included in that), on a 100% mortgage, repayment at 5% would be £532 a month.

So £628 a month for a 2 bed with decent size garden and garage.

You can only ever get 90% max on SO's, so the monthly payment would actually be £574 a month.

Cheaper than renting. Which is ALWAYS the point thats always missed whenever the whole SO scam thing comes up.

Yes, it has all it's downsides, but find a better place for the equivalent payment per month, where you are at least building up some equity in the property and a secure tennure and you only need a deposit of 9k to get in.

It's always pointed out that it's expensive to buy the whole property. SO is not designed for you to buy the whole property and never has been. Most simply sell their share on.

I agree:eek:

I see it as the solution to single income purchasing IMHO. You don't have compete against couples if you are only buying 1/2, 1/4 etc.

I saw one here and it worked out a lot cheaper than buying the whole house or renting. If it is cheaper than both it does not matter how it is dressed it is still cheaper and you have an equity stake also.

Graham_Devon

Really2 wrote: »

I agree

You're learning

GDB2222

I checked one out locally. The HA charges rent at 2.75% on the bit they own, which is fairly cheap. That is until I worked out that: they have no repairs to make, no voids, no agents fees, and the buyer has to pay all the service charges on the whole property, not just the buyer's %age. I strongly suspect that these are better as a rental deal than as a buying proposition, in which case just buy the lowest %age you can.

Really2

Graham_Devon wrote: »

You're learning

Shame you arn't

Chris2685

I have been considering it actually, and what you say does make short term sense Graham, it would be cheaper than paying rent on a similar property in that area. However, I do wonder about the additional costs associated with it. As GDB says above, the HA do not have to do any of the traditional things that LL/LA's do, such as repairs, boiler checks, decorating, maintenance, etc.........

So, if it was a 100% gurantee to me that I could buy the share and then sell it again whenever I wanted for the same or more, then it would be a no brainer. However, it is no where near that simple me thinks.

Might offer them 50k for 25%

Graham_Devon

Chris2685 wrote: »

I have been considering it actually, and what you say does make short term sense Graham, it would be cheaper than paying rent on a similar property in that area. However, I do wonder about the additional costs associated with it. As GDB says above, the HA do not have to do any of the traditional things that LL/LA's do, such as repairs, boiler checks, decorating, maintenance, etc.........

So, if it was a 100% gurantee to me that I could buy the share and then sell it again whenever I wanted for the same or more, then it would be a no brainer. However, it is no where near that simple me thinks.

Might offer them 50k for 25%

You would be responsible for updates. I.e. if it needs a new boiler, or new windows etc, you'd be responsible for those costs in full. It's just part of the responsibility you take on.

Mine have pretty much let me do whatever I like. Had a new kitchen put in which me and dad did, they didn't blink an eyelid when I asked. I was expecting to have to have it done by certain firms etc. Similarly, I just got permission to change the bathroom, and they said I could do whatever I liked, so long as when I sell, the bathroom functions as a bathroom.

The buildings insurance is normally covered in the rent. I only have contents insurance. Am free to change utility suppliers like anyone else would, and also got rid of the pre pay meter when I moved in, plus got rid of economy 7.

Only hassle I get from them is letters about cutting grass, cars have to have tax etc. They send these out periodically to all of those in the close if there is say one car untaxed.

Biggest thing to bear in mind is that probably, half of you on your site will be paying, whereas the other half will be sitting there, greeting you home from work swigging fosters and having a barbecue, while their kids think it's amusing to kick footballs at your car. You will be paying to keep these people....i..e they pay no service charge, but get all the benefits of the gardening for communal areas, drainage, lighting etc. They also crate a larger service charge by destroying fencing etc, which your service charge then has to cough up to replace.

Similarly, we've had a couple of untaxed cars literally dumped by these people on the road. The housing association charged all those paying the service charge to collect these vehicles. Those placed in the site by the council know this, so it's a cheap way for them to dump their battered non runners. Only had one family doing this I must admit, but it only takes one family to ruin it for everyone.

We also have things like community days for the kids (face painting, clowns etc), and 3 huge skips a year place on site. Unfortunately, those who don't pay for this also make full use of these skips in the daytime, and have loaded them completely before you get home from work to have a chance of using them.

So if you can deal with that aspect, every other aspect should be a breeze. It's certainly my biggest problem, of which, if they do get rid of a really bad family, they will just ship in another really bad family from another site they have, i..e we get a swap.

Luckily, I'm right down the end of the owners part, so only have to drive past

Oh, and turnover is quite high. Got about 20 owned ones. In the four years I have lived there, have seen I'd guess about 12 move in and out. So that's the only experience I have of selling shares...seeing others doing so pretty quickly and easily.

Chris2685

Not really selling it to me there Graham, lol.

Dirk_Rambo

1 of my girlfreinds was thinking of doing the shared-ownership thing. lucky i read this thread and shown it to her. shes changed her mind sharpish, luck escape. thanx to the op. it looks like a right ripoff

Graham_Devon

Chris2685 wrote: »

Not really selling it to me there Graham, lol.

LOL. I'm not really trying to. Just trying to be honest. No point me shouting that's it's all good, as it aint!

You get a low payment each month and a decent (for the money) house. With that, you get problems.

Go to any new build and you will get the same problems with shipped in tennants in all honesty.