a Little Shared Ownership whinge.. What to do?

LittleMissAspie

Your salary is excellent and your rent seems low for London. We used to rent a 1-bed house for £630 per month in Cambridge and that was one of the cheapest, thought London would be more. So I think you should have more savings by now. Why not do an SOA and see where you can cut down your outgoings, increase those savings to 60k and that will give you a decent deposit on a 2-bed. I say 2-bed because you then have the option to get a lodger or a partner+baby.

scriv

We investigated this and found that there are not many mortgage lenders prepared to lend on them - and you also have to satisfy a lot of criteria by the Housing Association concerned. All additional hurdles in a difficult climate.

Svenena

LittleMissAspie wrote: »

Your salary is excellent and your rent seems low for London. We used to rent a 1-bed house for £630 per month in Cambridge and that was one of the cheapest, thought London would be more. So I think you should have more savings by now. Why not do an SOA and see where you can cut down your outgoings, increase those savings to 60k and that will give you a decent deposit on a 2-bed. I say 2-bed because you then have the option to get a lodger or a partner+baby.

I agree with this. On your rent and earnings I would be able to save around 12.5k a year. I'd personally rather save for a couple more years and buy a whole house.

poppysarah

Kuztardd wrote: »

But.... its for some of us that will either be faced with total stagnancy of renting and wasting up to £7,000 a year on rental and 0% returns.
Or have a mortgage for the 40/50/75% etc on a property and know that if/when we sell that we should get back a small portion of what we have paid in?

And wasting the half you pay in rent and the fact you pay repairs on the whole of the property?

PasturesNew

Kuztardd wrote: »

Aged 35, single, living in London and renting.. I am paying upto £600 a month for this privilege too.

Bearing in mind the opportunities and higher wages London brings, £600 isn't too shabby at all. You can pay almost that where I am, in the 4rse end of nowhere, 100 miles from the nearest motorway, with no jobs advertised and the median salary for a full-time female being about £16k.

poppysarah

PasturesNew wrote: »

Bearing in mind the opportunities and higher wages London brings, £600 isn't too shabby at all..

That doesn't mean it's not an astroundingly huge amount of money.

Cheap rents for all!

Dundunbanza

betmunch wrote: »

In my opinion, Shared ownership is a very good option for a lot of people, but not everyone. it shouldnt be dismissed categorically, but should be considered as a viable option

I totally agree. I bought a shared ownership property and then bought the remaining shares and eventually sold it on the open market within 2 weeks of it being up for sale, this was a few years back and enabled me to buy a bigger property. A colleague of mine also did the same.

I had no problems getting a mortgage for or selling this property.

If you go into shared ownership you have to have the mindset of eventually buying the remaining shares from the outset if that's what you want to do.

PasturesNew

Dundunbanza wrote: »

I totally agree. I bought a shared ownership property and then bought the remaining shares and eventually sold it on the open market within 2 weeks of it being up for sale, this was a few years back and enabled me to buy a bigger property. A colleague of mine also did the same.

I had no problems getting a mortgage for or selling this property.

If you go into shared ownership you have to have the mindset of eventually buying the remaining shares from the outset if that's what you want to do.

And that's the difference - you did it some time ago, in a rising market, when the banking system and the world weren't in crisis. And, for a lower amount.

Stealth_gaijin

Kuztardd wrote: »

Aged 35, single, living in London and renting.. I am paying upto £600 a month for this privilege too.

I was tempted by shared ownership, but people on here seem to loathe them..

I had been thinking about getting a 2 bedroom flat in South London (Bermondsey/Stockwell/Southwark etc) so I can rent out the second room to cover the Shared ownership rent.

I was in a similar situation about two years ago and I have pretty much done what you described and have been really pleased with my decision. Reading over this forum now I am surprised to see so many negative comments about shared ownership. However, it clearly isn't for everyone. I am careful with money and I after the first few months I have been overpaying my mortgage usually by the maximum amount each month.

Choose your property carefully - will it be easy to resell in the future? Can you buy 100% if that is your goal?
If you have a lodger the tax free allowance is currently £4,250 per year.

missblonde

I bought a shared ownership 1 bed house in the South East in 2007 at peak of market so I felt that it was my only choice as a single person. At the time it was (I thought) the best decision for me, I was 25, on my own, didn't like the idea of renting and I wanted my independence. Now 3 years on, I wish I had rented as I've now bought a house with my boyfriend which we are currently renovating. It has, to date, taken me almost a year to get my SO house sold and the original chain collapsed about a week before we were due to exchange causing a lot of stress and lost funds. If you're going to be there for the long term it might work out ok, but if its only a short term idea (less than 5 years) then I'd rent if I had the choice again.

I was only allowed to sell initially through the Housing association, which was all good as they had me two viewings within 2 weeks in early March this year. However they didn't check if the buyers had sufficent funds and her mortgage offer was eventually removed as she and her solicitor (not local and it was a local scheme) didn't understand the scheme and it was considered by her lender too high risk (was no problem at all for me three years ago when we still have 0% mortgages and the like). The housing association then allowed me to sell on the open market (October 2010) and after 3 viewings I had two offers, one of which I am currently proceeding with and am hoping to complete in Jan/Feb 2011. In the meantime the market has dropped again and I'm now having to sell in negative equity. I couldn't rent it out as the terms of my lease prevent me in doing so (make sure you check this).

I do love my house (although I'm not so fond of it now!) and if I was going to be here another few years until the market picks up (if ever) then it wouldn't have been a problem. If you do decide to go ahead then make sure you choose your scheme wisely. Mine is 75% ownership and no rent but you can't buy any remaining shares until you've been there for 15 years! If you think you'll be there sufficient time to purchase more shares and/or the remainer of the house then that would probably be a safer choice as they are a nightmare to sell on (at least mine has been!).

Good luck though whatever you decide!