25% 50% 75% Ownership offers

leveller2911

Well as long as youve done your homework only time will tell if it was the right decision.Good luck

One thing I would mention is the schemes I have looked at were about 20% overpriced and I would never buy a 1 bedroom flat/house..

abbadon3

Since i'll be living on my own a 1 bedroom is fine :P - Unless you meant you wouldn't buy one due to sell on issues?

I don't think the property i'm getting is overpriced - but i have gone in at the asking price. (Might be a bit of a newbie error).

The others in the same block have (or so i am lead to believe) sold for the asking price as well. It appears to be a fairly popular development (due to it's location mainly i imagine). And the flat next door which i wanted to get, sold before i could view it.

tonycottee

I know 2 people that have bought shared equity homes. Buying doesn't seem to be the problem, it's the selling up where problems arise.
The 1st guy I know lived in his shared equity home from around 2002 until 2007 and when he finally sold up, even though the value of his propery rose by about £20000, made about £1000.
The couple I know at the moment that live in one (owned by Prospectus), are thinking twice about moving. They have to spend £300 on a valuation - this is done by somebody designated by Prospectus. Prospectus then have 2 months where they can look through their lists for potential buyers. If they don't find 1, then the house can be put on the market at the price set at the valuation mentioned earlier. The couple has to sell at this price and can't take any lower. However the valuation is only valid for 3 months, and once this is finished, they have to pay another £300 until the property is sold or they give up.
Obviously people should make their own decision about these schemes but as I've said I only know 2 people that have taken part in them, and I know both would not do it again

GeminiBlue

Anyone looking to buy Part Rent Part Buy Property be very careful to what you let yourself into. I have been a Part Buy Part Rent owner for nearly 5 years. I am now at a point where the rent/service portion is almost as big as my mortgage outlay! I am now stuck with a property which I could possibly never afford to pay off the remaining share because of escalating rent and service charges.

I could go on for hours on how the local housing authority rip you off (I don’t think on this website I am allowed to reveal which particular scheme I am on so I am basing on my personal experience). But are they ripping you off? Possibly not - what most people see is an affordable way on the housing market and so the rose tinted glasses are placed firmly on - sign the deeds and a way you go! What a lot of people do not do and I include myself is the following:

READ CAREFULLY THE CONTRACT AND THE OWNERS MANUAL before you purchase. You will then see what risks and liabilities you will be responsible for. You can make a view on whether its value for money or not.

A few further things you need to know before purchasing.

1) MORTGAGE LENDERS: There are only a few mortgage lenders who will provide a mortgage for part buy - Halifax, Abbey and Nationwide (this may have increased since I took out my original mortgage). Therefore it is difficult to get a good mortgage deal.
2) MAINTENANCE OF YOUR PROPERTY: You may own say 40% of the property and the housing association may own 60% but you have 100% responsibility for your repairs ie in the first two years the brand new boiler failed, the HA didn’t pay 60% towards the cost to repair it; it was all my responsibility.
3) RENT SERVICE CHARGE: The rent goes up each year no matter. The service charge goes up no matter and any shortfall you will pay. 1 year I was asked to pay a further £800 for the failures of the HA to control servcie charge costs.
4) WHO DO YOU LIVE WITH: You could end up living next door to unsavoury council tennants who are not paying anything but live in the same conditions as you. This is a very valid pyschological point for you to consider. Their repairs are paid for and you don’t know who will end potentially living next door.
5) BUYING MORE OF THE DREAM: If like me you want to buy your whole property the dilemma will always be (if you have spare cash) do I pay off portions of the mortgage early or buy extra shares in your property - you cant do both as you will find that you do not have enough money to do it!!
6) Ask for future forecasts of rent and service charges going forward as this will allow you to decide on whether you can afford the level of commitment. My charges have almost doubled since moving in 5 years ago. How does this compare with your own current renting situation?

Finally if you do wish to pursue this option I advise you to buy as much of the share as you can upfront as it will cost you less in the long-term. I advise you not going for the seemingly attractive 25% entry level share option as the payback will be huge in the long-term.

Lastly if you are not a keyworker like me then you will also be at a disadvantage as you will not reap the benefits that keyworkers receive.

I hope this helps others to make a more informed decision about whether to go forward with part buy part rent. Is it worth it I would say NO. To reiterate: Read the Contract and the homeowners manual before you buy and make sure you do your sums.

However I do fully understand the sentiment of getting on the elusive property ladder with an affordable outlay but if you can wait, save and buy your own property outright it will be far better in the long term.

All the best!

newwen112

Worst of both workds.

mattdragon2

My mum is in the same position as geminiblue.

She bought shared ownership, now the rent has increase to a stupid amount, she can't afford to pay off the mortgage cause of the rent.

She cannot sell cause when you have shared ownership its very complicated.

It was the worst decision she ever made and she regrets every moment she got conned into it.

10 years down the line it's still going and you only need to read these posts to see everyone has heard from a friend how much of a con this scheme is.

If you are stupid enough to go for this scheme after reading all these posts then you deserve the consequences, sorry but you won't be happy.

Wickedkitten

abbadon3 wrote: »

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.

You can end up in negative equity, not be able to remortgage and the interest rate could rise which would wipe out any savings that you have that would go towards repaying the loan.

On the flipside, prices could rise higher than the rate of any savings which would leave you with a shortfall when it comes time to repay.

Nikel

Snared ownership. But it is for the desperate.

poppysarah

They had a couple on Countryfile as part of a garbled report about how expensive sec ond homes were in the countryside and then showing a young couple wanting to buy a first home but having to buy an "affordable" house for 30% of 200k property.

I believe that only being able to buy a % of the property makes that property unaffordable.

The couple also hoped to buy the whole property at some point in the future? How? Did they think their incomes would suddenly increase enough to be able to afford to buy the rest?

I weep for people who think it's ok to buy a % of a property. What will they expect their children to be able to afford? The natural progression would be for them to be able to buy a smaller and smaller part of their property - and eventually future generations will buy 0.005% of a property and rent the rest.

*sighs*

abbadon3

I think provided you have a clear and set plan to pay off the % you do not own over a fixed period of time there is no problem buying a % of a house and not the full thing.

Buying it and going "i'm sure i'll be able to afford that bit later" is not quite so good.

Anyway - exchange of contracts is today!