Save for a deposit OR part ownership?

kksweety

Hi,

I've just turned 24 so think it is about time to think about buying.

Currently renting and live with partner @ just over £500/month.

I was talking to a friend who has a part ownership on a flat and apparently had to pay no deposit. I have no idea how these schemes work and don't know if it is worth looking into that or saving up for a couple of years for a 20% (ish) deposit.

Any advice on which way to go would be much appreciated.

BitterAndTwisted

100% ownership, even if it's after 25 years has to be better than owning only part of a property. You've got plenty of time to save a deposit.

sonastin

Saving will almost certainly be the better way to go.

Shared ownership comes with all manner of conditions attached. Sometimes it is easy to fulfil these conditions but other times they become a series of hurdles to overcome and hoops to jump through. Why get yourself into that unless its absolutely necessary.

Now is a good time to *think* about buying but not necessarily the right time to buy. Do a bit of research and educate yourself a bit about a) the pros and cons of home ownership and b) the current housing market - ignore what anyone other than someone who has bought/sold in the last 2 years has to say; the market at the moment is particularly strange and not like it was when [every other homeowner you speak to] bought their house. And in the meantime, get saving. Armed with a good deposit and a bit of knowledge, you'll be in a much better position to buy your first home.

spud211

Save save save - shared owneship is only suitable in a small minority of situtions where you are desperate to buy, and from what you have said..you don't fall in to this group.

You are always better to save + buy 100% if you have the option, plus prices are expected to fall over the next couple of years so you may well get a much better deal by waiting anyway

kksweety

Thanks for the advice, I'll start looking into high interest savings accounts and start to keep an eye on house prices in areas i'd be interested in.

Thanks Again.

thriftychap_2

Please don’t be put off key worker/first time buyer schemes by the few more narrow minded individuals here, they are very polemic in the arguments.

I am a teacher and was a FTB; i chose to do a scheme with the coop that i am extremely happy with. It means i can afford my own place with plenty left over at the end of the month.

Where these schemes will fail is down to individuals own inclination or lack of to be careful with money and plan for the future. If i was to spend all my disposable income each month on a new car, eating out and clothes etc and then in 25 years or whatever term the loan is on have to then take out a mortgage to buy the remaining % of my property i would agree the it’s not a good situation to be in. However the scheme has not failed, i would have failed.

If however i decide to use my disposable income to a) make substantial overpayments on my 62K mortgage to reduce the term from 25 years to 7 (this is an aim) or b) save our 1300 pounds each month to eventually buy the remaining 40% in 4/6 years time (c) pay as much of the 40% 2nd charge back as i can in two years then remortgage and rent the flat with a LTV ratio of 70% which will earn us money each month and move to a 3 bed home and start a family with a flat that is paying for itself and making us money.

Any of the above is possible if you are astute, the schemes in question can be either a blessing or a burden, and it depends on what you make of your individual circumstances.

I wish you all the luck with your pursuit of your own home. I am very pleased with the scheme i am on and the service from the coop bank has been and continues to be exceptional.

Oh, just a quick note, i did originally buy the flat on my own. My OH is moving in Feb when she qualifies as a nurse, hence the reason our savings capacity will be 1k - 1.5k per month. I have also received 2 promotions in 2 the last 1.5 years so my earnings have gone up as well. I mention this as I’m sure somebody will pick up on the fact these schemes are meant for people who can’t afford a house on the open market, which now we clearly can but could not 1.5 years ago.

Best of luck.