Shared Ownership in E14

SeXyDeViL

Hello all

After delving a little deeper into the mortgage market I am looking into the option of shared ownership, is this a good option for me as a 1st time buyer?
I am looking specifically in E14 Canary Wharf riverside apartment/house

As stated in previous posts my credit rating isnt the best.. not even good.. its bad.. real bad , but I can get mortgages at a rate of over 6% :rolleyes: .

Ive read up alot on shared ownership & it seems a good avenue to persue due to lower monthly payments but can anybody give me advice on advantages/disadvantages on the subject?

Any advice would be much appreciated

Many thanks

sanfrancisco

this may help...http://property.timesonline.co.uk/article/0,,14049-2378182,00.html

"A rise in repossessions is casting a shadow over one of London’s property success stories, discovers Helen Davies"

whambamboo

I'd have a read of this.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=36175

Apparently there are 2,500 vacant rental flats in E14.

There is *massive* oversupply of these flats, and they will be hit very badly in a downturn. You could commit to spending the rest of your life paying off a fraction of the ownership, only to find that you are in serious negative equity on a flat that nobody wants to buy.

If you are going to buy, buy a house in a nice area in short supply, not one of 50,000 low-grade flats. But then I doubt you can get shared ownership on anything worth having - i.e. a 3 bed house in say Woodford.

Bargain_Rzl

I'd be concerned about your credit rating. If it's as awful as you say it is, you may fall at two hurdles at once - a housing association may be reluctant to take you on for an SO scheme, and don't forget you've still got to be able to get a mortgage for the share you buy!

BobProperty

sanfrancisco wrote:

this may help...http://property.timesonline.co.uk/article/0,,14049-2378182,00.html

"A rise in repossessions is casting a shadow over one of London’s property success stories, discovers Helen Davies"

Just reading this article, no wonder amateurs do so badly when the so called experts are so clever:-
A few quotes:
Savills Residential Research says the average value of flats “east of City” (which includes Wapping, Bermondsey, Limehouse and the Isle of Dogs) rose by just 2.2% between September 2002 and June 2006.
and
The Docklands markets have just started to grow again, says Barnes. “Almost all the growth in the past four years has taken place in the second quarter of 2006.”
er, so that market was flat for 3 3/4 years then went up 2.2% ? Wow, what an investment :rotfl:
and there's more:
Liam Bailey, head of research at estate agency Knight Frank, agrees, but advises investors, especially those looking east beyond the Isle of Dogs, “to look at capital growth over the long term, not rental yields”.
Really good advice there Liam, you don't need to worry about being able to pay the mortgage on your BTL, just ignore it for 20 years and sell out and make a capital gain, easy peasy. Shame about the other bits in the article mentioning that: Chesterton’s Tower Bridge office, estimates 25%-30% of properties on his books are repossessions, most originally bought by investors.....“Amateur buy-to-let investors who simply barnstormed into the market have found themselves in over their heads.” and that Nor can those selling count on large capital gains. Good job you only get paid to sell them.

BobProperty

Sorry for a bit of hijacking there. To the OP, Shared Ownership has been discussed often on here (sometimes referred to as SO). Lynzpower is worth reading as she has now decided to sell out of her SO.

lynzpower

hi there - you rang

Right good and bad things with SO

Ive got a So flat in e3, which Im about to sell, I know E14 pretty well as well.

Ok what are the good things about it?

I have a great 2 double bedroomed ground floor flat with a patio & garden , which in london terms is big and spacious. One bedroom is has a king size bed in it, and there is just a lot of space here ( now weve moved all our spare carp out!)

It is in a secure block in a conservation area of E3 (if you know e3 youll know where i mean!) im close to tube & night buses, this area is really good.

The housing association is to a certain degree easy to deal with, i have nothing from them, the odd newsletter, they collect their rent, and thats that. I did get into arrears with them late last year due to my own poor financial management and they were really helpful

the rent side of it is cheap, way cheaper than a mortgage for 100% of it ( but then I got a good deal on 4.10% apr a couple of years ago)

Im selling up for a number of reasons, none SPECIFICALLY to do with SO, altohugh partly it is.

I bought the flat as a single person, with the intention of training to become a foster carer ( hence the 2bed flat) for various personal reasons ( including an out of the blue fiancee!) im not pursuing this. Therefore we dont need a 2 bedroom flat.

We are going to sell up, bank whatever money is in it, ( maybe a bit of *profit* certainly my deposit) and we have realised it is SIGNIFICANTLY cheaper to rent, and to have interest accruing on our money in the bank.

Additionally, my fiancee has a dog who is not allowed to live with us as per the lease, so thats another reason why we are getting out

Im on long term sick leave too, my salary is not secure at all, so thats another reason to sell.

I would say though that I bought this flat, when I couldnt afford it. I took a loan from the family toward the deposit, and I ran up credit to death when I moved in and everything was bouncing all over the place for a while ther.e If you really want to do it, do it. But for heavens sake dont make the mistake i did and do it when you simply dont have the money to shell out. Its an expensive process, especially furnishings and the like, it can cost you a damn fortune.

I also went on an interest only, with the idea that hell, in a couple of years ill be earning more. Well im not. What I learned from this is not to make assumptions to convince yourself you should do it, as I did. Be reaslistic.

Also even if the area is stamp duty exempt, as parts of e14 are I believe still youll still have to pay it, which for me ran to a couple of grand if i remember rightly

Where abouts in E14 is it, do you live round there now ?

SeXyDeViL

Many thanks Lynz.. & many thanks bob for cleverly grabbing her attention!

Lynz much appreciated, your advice has put a different perspective on SO & also the comments I read earlier about 'house prices may not rise' and 'who would buy a 2nd hand flat in Canary Wharf when you can buy brand new cz theres so many' have put SO in a new light.

Are these valid comments that I should be concerned about?
Obviousley nobody can predict rises & falls in property value but do you know if Canary Wharf is good for 'buy to live in' and still expect a good rise in value especially with all the development & the Games coming in 2012?

Im looking for a riverside house or apartment as close to Canada Square as possible.. South Quay, Crossharbour, West india Quay.. the nice parts :rotfl:

I live close to canary Wharf right now but wouldnt buy in this area

izoomzoom

Hiya

Just wanted to ask, have you made any improvements to your SO and will you benefit fully from these or, will the HA take their portion ? I have read that this often upsets people (and I understand fully why).

As you can see, we are going down this road, but are going with repayment mortgage with overpayments.

We will run up a bit of debt buying furniture / appliances etc and I hope we will pay these off before we start on house improvements. (I believe we are pretty good with money, as we have no debt, except our pending mortgage.

SeXyDeViL

Izoom

Where is your S O property & did you make value on this?

Do you suggest S O if you are hoping to make money on a property?

Any advice would be appreciated

lynzpower

SeXyDeViL wrote:

Many thanks Lynz.. & many thanks bob for cleverly grabbing her attention!

Lynz much appreciated, your advice has put a different perspective on SO & also the comments I read earlier about 'house prices may not rise' and 'who would buy a 2nd hand flat in Canary Wharf when you can buy brand new cz theres so many' have put SO in a new light.

Are these valid comments that I should be concerned about?
Obviousley nobody can predict rises & falls in property value but do you know if Canary Wharf is good for 'buy to live in' and still expect a good rise in value especially with all the development & the Games coming in 2012?

Im looking for a riverside house or apartment as close to Canada Square as possible.. South Quay, Crossharbour, West india Quay.. the nice parts :rotfl:

I live close to canary Wharf right now but wouldnt buy in this area

Right well heres the deal

You need to find a shared ownership place in the area where you want to buy. Crossharbour, west india, in all fairness I doubt there is muhc shared ownership property there. Ive seen some round blackwall, crisp street, poplar high st, shadwell, limehouse. You dont get to pick & choose what properties are shared ownership do you, you only get the pick of whats there, and they are built predominantly where land is cheap. Crossharbour, etc isnt cheap.
Im presuming you live in one of these areas now or possibly further on the island? TBH I doubt very much you will find ANY SO closer to canada square than the places Ive mentioned.


Your talking about the rises, what difference will that make or not make to you if you intend to live in it. the resale market of shared ownership is very different to standard property. ONe, only first time buyers can buy them two, your housing association will have clear direction on how the flat is to be sold. Mine told me that I had to offer it back to them, pay 500 for the valuation which I had to stick with and they would sell it to someone on thier waiting lists. This is to keep them affordable, and not end up sky high like the rest of the property market. IN my case though, my HA has said, that in fact they dont have a waiting list at the mo and I can sell my share via an estate agent or privately, they keep thier share as it is. How this is going to work in pactice I guess I have to wait and see, but we are hoping to get the EAs round next week to value.

I dont think all this olympic business is going to make a big difference to life in this area. Lets face it transport is excellent really, and the wharf is a centre of commerce in its own right. I think the borough has improved dramatically since I started renting here 4 years ago.

When re-selling the issue is dont lose sight of your market. I could have done this place up like a palace, but it wouldnt make much difference as technically its FTBs that have to buy it and theres no point in aiming for a massive profit, they are not going to be able to get the finance to pay for it.

I havent done a great deal of work on it ( although god knows it feels like it!) just painted and decorated ourselves and kept all the rooms as they were, no extensions or conservatories etc. I expect that any rise in the value of the property will be the general rise of the area, and not anything I specificlaly have done to this flat IYSWIM, although it does look fab now! :j