Shared Ownership

LudaMusser

I came very close to buying a shared ownership property in July 2010, it would have been built and finished last month. When I went to HSBC to enquire about a mortgage an advisor said why don`t you see what mortgage you can get and just try and buy a house outright, you would then own 100%.

I`m really glad I took his advice. I think the SO offers lots of pros and cons though. I think one of the biggest downsides to a SO property is that if you want to sell and move on you will never be able to take 100% of the profit that you (hopefully) make as you don`t own the house outright. This will then make it a problem moving on as you won`t have as much money behind you. In a way it`s not helping the market, people who have bought SO properties will struggle to move.
A friend of a friend has recently bought a SO in Warwick and said that the most they can buy is 80%. I don`t think all SO properties work in this way, I would hope to own it outright if I really liked it otherwise you will have to rent that 20% forever.
One of the reason I backed out of the SO 2 bed house I was looking at is because the housing association kept coming back to me and saying we need a larger deposit, this is my fault for having some savings. I said how do you expect me to furnish the house? It would be a bare shell without even carpets. I`m glad I binned it because I drove past a couple of weeks ago and had a look, its very cramped and there appears to be little room for parking. The project is a three year build so means its still a huge building site. It`s a good way to get away from outright renting and own a bit of your own property but what concerns me is that so HA`s won`t ever sell you the full share

geoffky

when fools rush in...they go for shared ownership...

thriftychap_2

You must take all SO schemes on merit as they all offer different things. I’m happy with mine. I purchased my flat at the bottom of the market in 2009 (lucky i know) costing 110k (open market). Initial share purchased is 60% (66k, - the 4k i put down = 61k = mortgage of £296 pm) which got me a fab mortgage rate due to the LTV ratio. This means i am able to make massive overpayments each month. In nearly 2 years i have paid off 5k in my mortgage as well as save for our wedding and invest. The flat was valued at 125k to 130k on Friday which means if i sold now on the open market (which i can) for 125k my 60% is worth 75k, this leaves me with 11k. Not bad for SO i think you would agree.

Our plan is to stay here until my 0% SO loan expires in 3 years, after this i pay 1.75% interest. (I pay no rent; it’s not part buy/rent). During this time we hope to over pay by 30k. This, if the market stays the same will leave me with a nice 41k ish deposit for our next place. I also have investments funds which i can access in 3 years if i need a bigger deposit.

Therefore SO has worked well for me. My particular scheme is not a con, however YES it does prop up the property market.

Check out your proposed scheme, personally i dont like the part own/rent schemes or the schemes where you can only buy new builds and cannot negotiate.

thriftychap_2

LudaMusser wrote: »

It`s a good way to get away from outright renting and own a bit of your own property but what concerns me is that so HA`s won`t ever sell you the full share

Not true of all schemes. I simply have 2 charges (loans) instead of 1, so striclty speaking i am not sure if its SO.......Despite what i have posted........ill check this out. I can do what i like to the property.

poppy10_2

thriftychap wrote: »

Our plan is to stay here until my 0% SO loan expires in 3 years, after this i pay 1.75% interest. (I pay no rent; it’s not part buy/rent).
Therefore SO has worked well for me. My particular scheme is not a con, however YES it does prop up the property market.

Sounds like you have a shared equity scheme rather than a shared ownsership scheme. Not really the same thing.

wymondham

Shared Ownership & Shared Equity schemes exist for one purpose only - to sell property that is overpriced. If you can't afford to buy without using a scheme then please go in with your eyes open and do your homework very carefully beforehand.

thriftychap_2

wymondham wrote: »

Shared Ownership & Shared Equity schemes exist for one purpose only - to sell property that is overpriced. If you can't afford to buy without using a scheme then please go in with your eyes open and do your homework very carefully beforehand.

This post makes no sense! As rightly pointed out mine is a shared equity scheme. I was able to purchase any property i wanted on the open market and negotiate. I purchased a flat previously advertised for £143k for £109,500. (4 sold earlier between 130-135k)

The flat is now worth MORE than what i paid for it..............based on these FACTS the previous post is plain WRONG!

brit1234

thriftychap wrote: »

You must take all SO schemes on merit as they all offer different things. I’m happy with mine. I purchased my flat at the bottom of the market in 2009 (lucky i know) costing 110k (open market).

:rotfl::rotfl::rotfl::rotfl::rotfl:

I strongly expect you didn't buy at the bottom of the market, strongly suspect that.

:rotfl::rotfl::rotfl::rotfl::rotfl:


No house prices are falling again and will fall way below 2009 prices. Shared ownership just allows you to over pay for property.

thriftychap_2

looking at the graphs I purchased just at the right time so i find your animations strange as its me that fels a little smug about that(March 2009). This was complete luck i conceed. My scheme suits me and my circumstances.

Its also wishful thinking to expect prices to drop 15% (thats how much they would need to drop for my flat to return to 2009 price)

But i guess you have a crystal ball?

wymondham

thriftychap wrote: »

This post makes no sense! As rightly pointed out mine is a shared equity scheme. I was able to purchase any property i wanted on the open market and negotiate. I purchased a flat previously advertised for £143k for £109,500. (4 sold earlier between 130-135k)

The flat is now worth MORE than what i paid for it..............based on these FACTS the previous post is plain WRONG!

Why did you buy using a scheme rather than on the open market?