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poppysarah

abbadon3 wrote: »

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

What amount is it you'll be hoping to pay back?

Have you factored in saving it realisticly?

abbadon3

The amount to be paid back will be 20% of the property price at the time i pay it back - assuming there is no change in property prices (or insignificant change) over the next couple of years then i would be paying back ~20k.

I already have plans in place to ensure i have the funds to pay this back within a couple of years.

Also because of taking advantage of the 20% not being paid immiediately it means i am able to have a tiny mortgage. I couldn't even rent a property for the amount i'll be paying monthly.

abbadon3

The amount of people who seem to think ALL of these schemes are a con is worrying - anyone got some reasoning for why its a bad idea?

Obviously i havn't found a problem with it and my solicitor didn't bat an eyelid. Am i mising something or are you all just too negative? :P

abbadon3

Anyone?

(As it's my first day i have no idea how active these forums are so not sure if bumping this is neccesary or not!)

sonastin

In general, the view on this forum is that they are a bad idea because of the frequency with which people come here with tales of woe in relation to these schemes. I personally think that some of the schemes probably hold up OK and the people entering into them may come out of it completely unscathed. But I also think that a lot of people believe they must own their own home and see these schemes as a shortcut to doing so, without the hard work of saving a decent deposit like (I reckon) the majority of homeowners have had to do. Home-ownership isn't the be-all-and-end-all and too many rush into these schemes without fully understanding what they are letting themselves in for. There isn't as much flexibility as with 100% ownership because there is another party involved who's needs/desires/views/requirements must be taken into account when you wish to do something with your home. If you fully understand the restrictions, have thought through the implications and are happy to take on the risks, good luck to you.

abbadon3

As far as i am aware there aren't any particular restrictions to worry about. The only difference from buying the flat outright is that at some point (of my choosing) over the next 10 years i have to pay back the 20%. For all other purposes it is my own home.

Everyone is talking about the risks involved but i fail to see how there is any risk (on a scheme like the one i'm using). I'd like to hear some of these horror stories if anyone has any to hand?

Just to clarify - i'm not using the scheme because i couldn't afford a property without it. I am putting down a 20k deposit as well. It's not a shortcut but rather a way of managing my cash flow.

sonastin

No restrictions at all? So you could sell 100% of the property to your mother-in-law for £100 next year if you want? How much do you have to pay to the developer then? 20% of the sale price, 20% of what you are paying now? 20% of some arbitrary value that some surveyor gets to pluck out of the air next year as a reasonable figure for "market value"?

The risk arises when people don't understand the answer to that question. And they find themselves in a position where they *have* to sell. And the other owner isn't willing to sell for a low price but they can't find a buyer willing to pay the price the other owner is willing to sell it for. And they have no money other than the equity (if any) tied up in the property so there is nothing to use to "pay-off" the other owner. And they end up trapped because they can't sell and can't move.

If you have the money to buy your partner out and it really is a no-strings interest free loan, you might be one of the lucky ones. Provided you are going into it eyes wide open.

abbadon3

At the poiont of sale i'd have to have a suveyor value the property and pay 20% of the value of the property (not 20% of the sale price). Which is the same process that must be followed when paying back the 20%.

Since i plan to pay back the 20% long before i sell the property this is a non-issue for me.

I can however see how that could cause problems for someone who trys to sell the house in a poor market. Is this the main issue people face when purchasing through a part ownership type scheme? If so that has lifted some worry!

leveller2911

Many Shared Ownership do not allow the buyer to EVER buy 100% of the property, many have a maximum of 80% so thinking logically if you then wish to sell who will want to buy 80% of a house where you are liable for all maintenance and need written permission to build a conservatory,extend or convert the attic.

All that and you still have to pay rent.I think people who are considering SO need to go through the small print with a fine toothed comb.Just up the road from me Bovis Homes built some SO with Sanctuary Housing and they will never be 100% for sale.

My personal gripe with some of these schemes is that some were for "Key Workers Only" IMO anyone who works and pays taxes is a "Key Worker"

abbadon3

My scheme is specificaly for First Time Buyers, so not a key workers one :P

I'd never try to buy a property that i'd never fully be able to own. I don't get why people would tbh. Also i would only go for a scheme which involved me paying part rent if it was the only way i could step onto the property market (I have an issue with paying rent - if im paying to live somewhere it better be paying for me to keep it!).

I don't think an of these issues people are bringing up will apply to me - so think i'm alright. Considering the completion date is fast approaching there had better not be anything i haven't noticed!