25% 50% 75% Ownership offers

BadgerFace_2

Rautavaara wrote: »

Such offers do look potentially good for rental however.

No, as they (all that I've ever looked at) have clauses which mean you cannot rent out the house.

sonastin

tara747 wrote: »

I seriously doubt that these schemes will appeal to FTBs in any great numbers. Only the seriously financially illiterate ones.

I'm always amazed how many seemingly intelligent people are seriously financially illiterate. I fear they may appeal to FTBs in great numbers for precisely that reason.

asdesigned

Does the scams also apply to Housing association shared ownership though? I could imagine that there are numerous private scams but find it harder to believe that the HA would get away with it?

knightstyle

Just hang on a minute, many schemes are not scams, just desperate builders trying to get some money in rather than leave a property empty. Our daughter has just moved from a part owner scheme run by a housing association, she rented 30% of the property and could never own it 100%. She sold it and now is in a house which she owns 75% and will pay the builder the remaining 25% in 10 years. So she basically has an interest free loan for 10 years.
So have a look at the scheme, take professional advice, see if others in the area have used the scheme, and make your decision.

skater_kat

my SO scheme is not a scam!
i have had a great experience and if i didnt have this opportunity i would still be a lodger somewhere. i am with a good housing association who have been really flexible with me and mnay other residents with regards to 'rules'. financially this is a good choice for me and i am not 'financially illiterate!'
maybe schemes like mine are hard to come by?

DVardysShadow

knightstyle wrote: »

Just hang on a minute, many schemes are not scams, just desperate builders trying to get some money in rather than leave a property empty. Our daughter has just moved from a part owner scheme run by a housing association, she rented 30% of the property and could never own it 100%. She sold it and now is in a house which she owns 75% and will pay the builder the remaining 25% in 10 years. So she basically has an interest free loan for 10 years.
So have a look at the scheme, take professional advice, see if others in the area have used the scheme, and make your decision.

Almost certain that the builder would have sold 100% ownership for90% of the price - and the 25% loan from the builder is actually a 15% loan to the builder.

So at the end of the 10 years, she will be paying back 167% of the actual loan, making an interest rate of 5.24%

poppysarah

knightstyle wrote: »

Just hang on a minute, many schemes are not scams, just desperate builders trying to get some money in rather than leave a property empty

They could reduce the price.

I've read a house costs about 25k to build...

Horizon81

DVardysShadow wrote: »

Almost certain that the builder would have sold 100% ownership for90% of the price - and the 25% loan from the builder is actually a 15% loan to the builder.

So at the end of the 10 years, she will be paying back 167% of the actual loan, making an interest rate of 5.24%

I'm sure a friend of mine enquired into a similar scheme but the 25% he had to pay in 10 years time was 25% of the value of the house in 10 years time, which would almost certainly be more than todays price. Even if house prices don't bounce back I suspect the builder would put a clause in there saying that you pay 'whichever is higher'.

abbadon3

I'm a first time buyer and i'm buying one of these at the moment. It's 80% of the property that i'll be paying for.

The other 20% is paid back at any point over the next 10 years at 20% of the value of the property at that time. I plan on paying this back within the next couple of years and so it acts as an interest free loan for me (assuming house prices don't change significantly over the next couple of years).

It in no way changes the flexibility of the house. I could rent it out, sell it, do whatever i like with it.

As far as myself, my parents and my solicitor are concerned there is no scam here. The 20/80% offer is also optional and so normal 100% mortgages can eb arranged of course.

twirlypinky

It's not a case of being financially illiterate, it's a case of being desperate.