Shared Ownership

oppers

Hi

I am currently looking at shared ownership (SO) properties to get on the property ladder. Please share your opinions, experiences etc.

I would love to hear from people who have already bought a property through this scheme and from people who have been selling.

Is it a good way to get on the property ladder?
Did you earn on it - did it help you to move upwards?
Anything to be wary off?

The property I am looking at is valued at £290k and is a 30% share. Will know in a few weeks if I have been accepted.

Thanks

Oppers

littlemissmoney

£290K seems a lot for a FTB. What about buying something smaller that's not SO?

lynzpower

really does depend where in the world you are, and size of the property etc, flat or house, does it have big rooms, garden, secure entry? Etc. Whats the non SO properties on the same road going for? this is a way to work out whether the property is overvalued.

I am selling my SO at the mo, and I got an open market valuations which were pretty high - around this figure! ( a big surprise for me) I have decided to market for less for a) quick sale b) to maintain what is "reasonable" I dont think I could have considered doing someone out of what the EAs valued at, which isnt particularly MSE, but there you are!

things to be wary of
1- find out from internet and asking around what the housing association is like, how are they at maintainence that sort of thing
2- housing associations cna be notoriously slow at getting thier act together in conveyancing so dont give your notice on your rented place until you have a realistic date for exchange.
3. Is it a new build flat, one delay I had was that the HA hadnt organised a managing company ( cleaning & maintainence) and this slowed things up too. Ask your solicitor to check with them about this at the start of the process, not find out at the last minute as I did that the contractors ( if they are using them) are not in place. (:wall:) If its a resale the vendor/ current occupier should be able to tell you whether there are any issues with the cleaners, maintainence teams.

Otherwise, everything is straightforward -well as straightforward as buying any property is :rotfl:

Christal_2

The flat me and OH are living in is bought through SO, 50%, price was under 200K. We went through it cause that was the only way we could afford something we like in our area that time. I'm a bit surprised to see that you are considering to buy a 290K on 30% which you will still be paying 70% on a rent which can be huge amount.....can you get a bit more on the share maybe 50%?

Reason being is you will either decide to buy more share or sell up, if you afford to buy more share on the property in a year or two, then you will be wasting loads of money on rent you pay to the HA. And with SO if you don't own the 100% it does have some limit when you come to sell, as you may have seen on other threads in this forum, so it may be safer to save a bit more and get more share to start with. Also you may want to know is:

1. Most banks/building societies do not lend to people who is buying through SO, unless you are buying 100%, then it's same with any other purchase. We asked around but in the end only Halifax can lend to us, and obviously you have a much smaller choice of products because of the limitation of lenders.

2. If you want to sell the 30% share later, you will usually have to give the HA one month to sell it first, then you can pursue with the open market, and there may be restriction on the price you can sell as well.

lynzpower

when I went for my mortgage 2 years ago there were loads of lenders, at least 15. I went with the Abbey which was about 30 quid less a month than the halifax.

Katuska

Hi,

We live in a S.O. flat in Wembley, London and to be honest it was probably THE mistake of our lives!!! The flat is satisfactory or maybe not even that. It is on an estate with 4 other buildings, newly built all of them. The quality of the flats is horrible, the walls are thin as paper and we can't even hang stuff up as the holes sort of rip out (paper wallls as I said!). The appliances are the cheapest possible on the market, too. But all this is nothing. When we purchased in 2004 the estate looked promising with hardly any families there. In the next year around 60-70% of the flats/houses were turned into Council accomodations and hell broke lose. I am not trying to offend anyone who lives on a council estate as your postcode doesn't determine who you are; however, on this particular estate the picture changed quickly. There's constant police presence, teenage thugs, muggings and shoplifting, etc. I have a small child and frankly I am scared to leave the building after dark. We have started the selling process and looking forward to selling by Jan/Feb 2007.
We decided to use SO as we didn't have the usual 10% deposit that was needed to buy a house at the time but I just wish we had waited and saved a bit longer.
Also, (however I'm not a 100% on this) apparently once we sell we have to pay 1% on the sale price to the Housing Association. We own 25% of the flat which is valued at £206,000. We bought it for £198,000 which means we make a 'whopping' £4000 profit (our 25%) but as we have to pay over £2000 to the Housing !!! AND pay their solicitor's fees, I'll be glad if we'll have money left for a cup of coffee at the end.
So that's my story and I wish it could have been a happier one.

izoomzoom

We first took a serious interest in SO two years ago when it because apparent that we could not afford to purchase in the traditional way.

I believe that I have researched the issue well and have read as much as I can about individual's experiences.

You are always going to get for and against, but let me highlight some things to you.

When you purchase a %, you pay a subsidised rental on the % not owned.

In addition to paying the HA rent, you have to foot the full bill for any repairs and mainteance. Some people get really peed off about this. Though if you purchase a flat, repairs and mainteance on the building is most probably shared with other flat owners.

You will be subject to a lease agreement that may have clauses that you find prohibitive - examples could include no pets, no businesses, no sub-letting etc.

HA are notoriously slow in doing their bit of the conveyancing.

When it comes to sell, unless you have own 100% you will have to get the property independently valued (by a surveyor I think, not a EA) - this has a fee and the property will only be sold for this figure. You may or may not like this figure.

You will also probably have to sell via the HA - they will find you buyers. There is a time limit for them to do this, and afterward you could market via a EA, but the selling price will probably only be what the independent valuation valued it at.

You will have to pay the HA to sell on your behalf too. My vendor is paying £700 + vat which equates to just under 1% in my purchase situation (which is actually quite competitive, I believe).

Finally, do not get your hopes up that you will get the place you have recently seen.

We looked for two years, saw a good dozen plus places (properties do not come up every day and were either offered smaller houses than we wanted, too expensive for us, bad areas and were disappointed many a time. We also found that they took months to build places (whilst all the others in the estate were finished and occupied). Perhaps that was just the builders though.

Anyway, enough for now. I suppose I could write a book.......

Katuska

izoomzoom wrote:

You will have to pay the HA to sell on your behalf too. My vendor is paying £700 + vat which equates to just under 1% in my purchase situation (which is actually quite competitive, I believe).

izoomzoom, do you know if you have to pay this 1% on the whole price of the property or only on the percentage you own?

Bargain_Rzl

lynzpower wrote:

2- housing associations cna be notoriously slow at getting thier act together in conveyancing so dont give your notice on your rented place until you have a realistic date for exchange.

Ha! I suspect Lynzpower knew I might respond to this...

I was supposed (according to HA deadline) to exchange by 18th September. It now looks like I'll be exchanging on Monday...

Not directly the HA's fault, but their solicitor is completely useless (see my signature!)

lynzpower

How long has it taken Bargain ?

izoomzoom

Katuska wrote:

izoomzoom, do you know if you have to pay this 1% on the whole price of the property or only on the percentage you own?

I think that this is particular to the HA that you are dealing with. My purchase is £75000 and I know that the HA is charging the vendor a flat fee £700 plus VAT, so you can see where my % calculation came from.

Contact your HA so that you will know exactly !