Shared Ownership

rfakes

Hi all.

Me and my fiance are considering entering a shared ownership mortgage.

We are just interested if anybody has any views on them?

Also we are seeking to find out:

- What happens when you want to sell your %?

Thanks in advance!

BrownBob

Hi i am also looking at a shared ownership at the moment, i have questioned all aspects of it and the way i look at it - you are risking less than buying 100% and if the market drops - yes you lose on your share but you should be able to buy new share at the lower market value.
If, like me you are renting at present, than if the worst happens and you lose the house you are no worse off than when you started (exept maybe you deposit).
When you come to sell, if it is with an authority (this is the case with mine but you should check the agreement) you normally have to offer it for sale back to the authority (or the sell it on your behalf) if they cannot sell within a set period (a number of weeks) you are then free so sell on the open market.
hope this helps a little

leveller2911

BrownBob wrote: »

Hi i am also looking at a shared ownership at the moment, i have questioned all aspects of it and the way i look at it - you are risking less than buying 100% and if the market drops - yes you lose on your share but you should be able to buy new share at the lower market value.
If, like me you are renting at present, than if the worst happens and you lose the house you are no worse off than when you started (exept maybe you deposit).
When you come to sell, if it is with an authority (this is the case with mine but you should check the agreement) you normally have to offer it for sale back to the authority (or the sell it on your behalf) if they cannot sell within a set period (a number of weeks) you are then free so sell on the open market.
hope this helps a little

Don't forget the possible shortfall too, the difference between what your mortgage was and the sale price.

Personally its not for me, needing the HA permission to do any changes,responsible for all maintenance. Many shared ownerships don't allow you to own 100%, so if you go on to buy another 20% and say own 80% ,if you want to sell who will want to buy 80% of a house.The shared ownership places around here have high rents too.

Try doing a search of the forum for Shared Ownership threads as there are many.

BrownBob

after re-reading my post it does appear that i sound a little careless, this was not my intention, i only intended to keep my reply short.:embarasse
However it may depend on how you look at it. If it is with an association there may be a maximum 80% clause, as it stands there is one with the one i hoping to get (this may change if people are unable to obtain a mortgage on this basis), this is not always a big issue. Yes - on the open market people may not wish to buy 80% of a property but depending where you live (where i live housing is in huge demand) the authority usually have a huge waiting list of people wanting shared ownership properties - this means that when/if you choose to sell, the authority do it for you and usually very quickly with a virtually guaranteed sale (again dependant on your area).
With regard to the rent - it depends on the deal you are looking at but i currently pay £400pm rent for a 3 bed authority property i can get the shared ownership 3 bed for £320pm with 15%deposit + £170pm rent on the remainder, so for an extra £90pm i am building equity in a home instead of giving it to the authority. I see that as a no brainer especially as houses in my area are 8 times average national annual earnings so buying any other way for a first time buyer is impossible. It is also worth noting that things like building insurance are usually covered in your rent.
One last point is concerning the "asking permission" thing - it is increadibly unlikely that you would get turned down for any home improvements as it benifits them aswell but they need to know incase you, for example decide to build a diy nuclear power plant in the garden, and if i had a stake in the house i would want to know also, so who can blame them.
Make sure that you take proffesional and completley independant advice before you make any decisions - good luck

rfakes

Thanks for your input.

At the end of the day it sounds pretty easy to sell your 80% share and move on?

££sc££

Was it a house you were looking at or a flat? If a flat, make sure you take into account the service charges.
"If, like me you are renting at present, than if the worst happens and you lose the house you are no worse off than when you started (exept maybe you deposit)."
I agree. The Mortagee Protection Clause, there to protect the lenders, actually protects the shared owner too if the property becomes repossessed, as often the Housing Assocation takes the hit of the shortfall.
I work for a housing assocation and we don't unreasanobly withold permission for changes to the property. The only difference i guess is, you can't get any Tom, !!!!!! or Harry into do works as we'll insist on certificates, e.g. with electrics and gas.....but that's probably safer for you and your family anyway!

rfakes

Just a quick update on this, me and my Fiance have been living in our shared ownership house for a month now and don't regret it one bit!