Shared ownership again sorry what's wrong with my logic?

sonastin

Another way of looking at it is what does shared ownership give you that renting doesn't? Rather than comparing with owning outright, compare with not owning at all...

You still have to pay rent. You still have to follow the rules set by the landlord (housing association). You can't just give your notice and move when you want to. You are now responsible for maintaining the property. But compared to that, you don't have to ask the landlords permission to redecorate. You might get a windfall if property prices rise - but if you're planning to buy somewhere else the money will be swallowed by the increase in that price too. You can't be evicted every 6 months. Shared ownerships have a much smaller pool of buyers to choose from so their prices tend to fall furthest and gain least.

So you gain security of tenure but against that you have an ongoing liability until you can find a buyer.
You gain the right to look after your property however you want but you have to foot the bill (100% of the bill, not just the 40% that you own).

What are you hoping to gain by buying a property? Will shared ownership offer that? If it does, go for it. But make sure that you fully understand the contract and what you are getting into. And more importantly, how you are going to get out of it. Not just when you plan to move now but under any circumstances - if you lost your job and couldn't afford it, if you had to relocate at short notice, if prices fall further and it is worth considerably less when you come to sell, etc etc. Go into it with your eyes open and you probably won't get your fingers burnt but make sure you're doing it for the right reasons. "getting a foot on the ladder" is not a good reason in this market.

CloudCuckooLand

If £268k will stretch you to the max, how will you ever buy the other 60% of the other one, its another £40k...

Get the £268k one under the £250k stamp duty threshold and it might be doable..? Its priced to try and avoid it, but probably won't.

hazyjo

Just a little comment on those prices - virtually nobody would pay a price between £250k-268k (your max) because of the stamp duty threshold.

Your maximum budget should be £250k (if you did go to that). Personally, I'd look at other things (not new builds) and compare against what you initially had in mind - up to £275k and leave a £250k offer on the table if you like something (or less if something's up for say £260k).

Good luck.

Jx

chimpxp

you can get some ex-local authority properties that would be suitable and priced around 220-250. I'm thinking they might be my best bet. I've now consumed enough information to realise that shared ownership is not a good idea even though on the surface it's very tempting.

hazyjo

Maybe you could stretch on area a bit? Could get much more for your money just a short train/tube ride out... if you need any suggestions, just ask - lots of us know greater London quite well - might make the world of difference.

Jx

chimpxp

well i'd like to stay close to here (e8 near london fields), but so does everyone hence mega price. I'm looking at dalston, hackney, stoke newington, lower clapton ........ at the moment

mr_fishbulb

chimpxp wrote: »

you can get some ex-local authority properties that would be suitable and priced around 220-250. I'm thinking they might be my best bet. I've now consumed enough information to realise that shared ownership is not a good idea even though on the surface it's very tempting.

Don't forget, even if you aren't going through shared ownership, buying a flat means you will have service charges and probably ground rent too.

Where abouts in London are you looking?

hazyjo

Would you consider Walthamstow? Might get a tad more for your money in Wanstead too, although still pricey.

Jx

BitterAndTwisted

Have you considered looking a bit further north of Stokie to Stamford Hill? I second the Walthamstow suggestion: there are some really nice Victorian properties there and the transport links are fab compared to somewhere like Hackney or Dalston

Jenniefour

I would say sit this out a while longer and keep looking - even in parts of London that have continued to defy gravity in the past couple of years the signs are really showing now that the market is being affected by the mortgage drought and conditions tightening in last 18 months - flats are extremely hard to sell and there's lots of them. So there will be more price reductions coming soon. Not to mention the general economic climate. There is absolutely no need to rush and every advantage in taking your time. To give you an example or two from my area (Ealing/Acton). A lovely flat was on the market for 9 months before it sold - went on for 460k and sold for 360. Cute little house went on for 520, sold for 460, on the market 6 months. Both in great locations. So, if you're patient you can get a lot more for your money. What's not selling now are not always the obvious ones that are more difficult to sell in any market. As doozer says keep away from new builds - there's always a premium to pay. Not to mention putting up with stupidly small bedrooms and the like - which are not always obvious when you see the show flat and are caught up with admiring the 'designer' kitchen - with all the doors conveniently taken off and made to look bigger.

And I would be looking up to the 280/300 mark as doozer says - save the properties, see which ones haven't sold in two, three, four, six months (some will be taken off and others let out) and are dropping their prices. I suspect there will be many more nice places to be had for a lot less than original asking price. And being in rented is a massive plus because it means you're a 'proceedable' buyer - estate agents are desparate for them.

Providing you've got all your ducks in a row - been to see independent mortage advisor, got your deposit and money for fees lined up etc. - you're in a great position. Make the most of it! And, if you haven't done it already, download propertybee so you can see exactly when a property went on the market and whether there have been any asking price changes since it went on the market.