Shared ownership scams

PasturesNew

My SO was 50/50. I was paying £121/month rent in 1990 or so. It was an experiment at the time.... mine was SO, next door was council. I figured at the time that his whole rent was probably less than 2x my rent on half. And the SO was over-priced, but I was living in a caravan and I couldn't afford anything else... so it worked for me. Had it about 7 years and at the end of that time was 5% in NE.

I bought security of tenure.

I'd do it again if I could, especially if rents were as low as discussed above.

The only annoyance about it was my studio/bedsit was valued at £50k for the whole thing in about 1989 ... and my neighbour's 2-bed was valued at £52k. But as a single person I was only allowed the studio, the 2-bed went to a couple.

Chris2685

Do you think the "sold for" prices on the website below would be the price of the share, or the price of 100%?

I am unsure which number it is, the lady on the phone did say but I can't remember, and can't make it out from the picture.

http://www.houseprices.co.uk/e.php?q=Trewarden+Avenue&n=10

Edit: Worked it out, number 46.
Looks like it has not been resold since before 2000...

Graham_Devon

Chris2685 wrote: »

Do you think the "sold for" prices on the website below would be the price of the share

That's how mine is reported, and all the ones around it. Makes the place look extremely cheap!

Chris2685

In that case, it looks as though in 2000 (I presume this one would be near that, but who knows), the shares sold for 30k for 25%.

The more I look at this and do the sums, the more I wonder if it could be a good move. Dangerous thoughts. Someone talk me out of it quick

Graham_Devon

Personally I'm not going to say anymore on it. You gotta do what's right for you.

You seem to want to be talked out of it, and want to call it a scam, so you can disregard it as a route.

Theres lots of threads about shared ownership in the house buying forum. You DO need to look past the posts which just slag it off (and I'm not having a pop here, the same as you did at the start of the thread) and look for the posts from people who have actually had, or have them.

Lot's of good information, lots of real experiences, good and bad. Like I said though, it seems you want to be talked out of it, and want to be told it's a scam, doesn't work, and anyone who get's involved in it pays a high price.

That's not my experience. As I said, the worst part of the experience for me is a couple of families that are housed by the council on our plot, which I think you will always get in "affordable" housing.

The new schemes certainly are not as good as a re-sale. A friend is looking into a scheme and asked my advice on a couple of things. This is the new homebuy thing. Seems in the scheme he was looking into, the tennant would be responsible for ALL of any negative equity on the home. I.e. if the house dropped by 25k in value, they would be responsible to cough up. However, if it rose by 25k in value, they would only take 40% of the rise. That, to me, is wholly wrong, but apparently part of the scheme he was looking into (schemme covering themselves I would guess).

Chris2685

Cheers Graham, very useful primary info there

I think the fact of the matter is that I am just a chicken, much to my wife's despair

Looks like the bungalow I posted is already under offer too!


BTW, on a resale will they accept 'an offer', or, like the new builds, do they have to get the price on the tin?

I can't help but think that if a mortgage lender is going to lend money on it, they will value it at less anyway?

Graham_Devon

Chris2685 wrote: »

Cheers Graham, very useful primary info there

I think the fact of the matter is that I am just a chicken, much to my wife's despair

Looks like the bungalow I posted is already under offer too!


BTW, on a resale will they accept 'an offer', or, like the new builds, do they have to get the price on the tin?

I can't help but think that if a mortgage lender is going to lend money on it, they will value it at less anyway?

Normally, if it's a housing association owned property, the price on the tin is the price you pay. No negotiation.

Had no problems with valuations from the bank either, even though mine is also overpriced (by about 30k) compared to similar locally.

I've found in previous threads, have to be very careful talking about shared ownership, as that's merely an umbrella to many types of schemes within it.

Scheme you are looking at is the same as mine, allbeit, no doubt slightly different terms as it's a different company.

You also can't buy 25% anymore. It's usually 40%. 25% is always a bit of a bargain when it comes to rent vs mortgage costs and nearly always is quite considerably cheaper than renting.

Other good points...market falls, if 10k gets wiped off the house, you only have 2.5k of the problem. Similarly, if you want to, you can then buy another share cheaper than your initial share. I will never buy another share though, as it will only make it harder for the next buyer, and therefore harder for me to shift.

Currently costs me £397 a month for my place. 2 bed semi. Similar rental is around £595-700 a month. Obviously my current cost is very much based on low interest rates as I'm on the SVR.

All I hope for is that you look into it properly if you are interested, rather than simply calling it a scam. Might well be a scam, but it's allowing me to live a much better quality of life than I could renting or indeed, buying a full house at the moment. Also allowing me to save a deposit at my own pace for a "real" house.

Chris2685

Cheers Graham.
90k share, probably need a 20% deposit considering the scheme involved = 18k deposit plus costs.

could possibly do it.

72k mortgage over 25 years

Assuming 6% mortgage, repayments would be £502.56
Rent is £24x4.33 = £103.92
Unsure of service charge, but even at £100 a month it would be a total of around £706 per month.

The initial outlay of 18k+costs to get a 2 bed terrace still doesn't sound too appealing. I'm currently paying £800 per month on a 3 bed semi, although in a slightly cheaper area, but not by much.

It's worth a consideration I guess, but for me not worth saving £100 a month on at the moment.

Cheers for your comments though Graham, they have been most helpful.

Graham_Devon

Chris2685 wrote: »

72k mortgage over 25 years

Assuming 6% mortgage, repayments would be £502.56
Rent is £24x4.33 = £103.92
Unsure of service charge, but even at £100 a month it would be a total of around £706 per month.

Just one thing, the service charge is probably included in the rent. It's how mine was advertised.

If it helps, my service charge is something like £17 a month. It's flats that have a big service charge.

Chris2685

OK, the lady on the phone said the service charge was extra. If that (using your figure, which could well not be the same of course) was included in the rent on the other 75%, it would bring the rent right down to £8 a week rent, which would be pretty insane I think.