Shared ownership/equity is a scam.

GGB

Jimmy_31 wrote: »

Properties in my area that were valued at 130k are now down to somewhere in the region of the 100k to 110k mark.

I think they will keep falling as most are not selling.

There comes a point though where they will just come off the market and create a price floor.

On my estate we bought our house for £100k in 2006, the highest sales price was June 2007 at £130k (next door to mine). We've just put ours on the market at £104k - the others for sale on the estate are £109k - £118k (identical houses! - if anything we've got a better garden than the others for sale).

If we don't sell it for £100k - £104k we just won't sell and will sit out the next couple of years, most on the estate are doing likewise.

HappyMJ

poppysarah wrote: »

It might be worth 70.

Depends what happens with the second (or is it third?) wave of credit crunching going on.

£70,000 for a 3 bed semi in a good area....It'll never happen. If the 1 bed flats at the end of my street also fall by that same ratio then they'll be priced at £37,500 (currently £70,000). Anyone on even a part time minimum wage could buy that. Only a salary of £9,000 per year would be needed to buy them. The rent on them is a fair £395 per month so I'm sure investors will be jumping in before they get priced that low. I'd like a 12.64% return on my investment as well.

Orpheo

GGB wrote: »

There comes a point though where they will just come off the market and create a price floor.

This is absolute and utter rubbish. There will always be people who need to sell.

A price floor... whatever next?

Orpheo

HappyMJ wrote: »

£70,000 for a 3 bed semi in a good area....It'll never happen.

It can happen.

Orpheo

GGB wrote: »

There comes a point though where they will just come off the market and create a price floor.

On my estate we bought our house for £100k in 2006, the highest sales price was June 2007 at £130k (next door to mine). We've just put ours on the market at £104k - the others for sale on the estate are £109k - £118k (identical houses! - if anything we've got a better garden than the others for sale).

If we don't sell it for £100k - £104k we just won't sell and will sit out the next couple of years, most on the estate are doing likewise.

You won't sell for 100 -104K.

You'd best get a comfy seat.

You'll be sitting it out for more than a couple of years.

kronenbourg

i am well confused as who to believe now
i am seriously thinking of doing the shared-ownership thing but after reading the comments am not to sure

heres the deal if anyone is interested

value of property - 125k
value of 40% share - 50k
monthly rental repayments - £223
monthly mortgage repayments - £189

the house is a new build owned by the council and in a lovely area across the road from where i live

i currently rent for £650 a month ex electricity/gas so this i think is a good opportunity for me

i have a bit of money saved but only for a 20-25% deposit on a similar priced house , getting a smaller mortgage will leave more money for me for other things

any thoughts ?

CheeseCat

HappyMJ wrote: »

£70,000 for a 3 bed semi in a good area....It'll never happen.

Well i'm due to complete on a 3 bed semi in a good area on 1st June for £75,000 so not too far away from this 'it'll never happen scenario'

and no it doesn't need complete gutting/modernisation etc. It needs between £2-4k of rendering work but I can live with that

Orpheo

kronenbourg wrote: »

i am well confused as who to believe now
i am seriously thinking of doing the shared-ownership thing but after reading the comments am not to sure

heres the deal if anyone is interested

value of property - 125k
value of 40% share - 50k
monthly rental repayments - £223
monthly mortgage repayments - £189

the house is a new build owned by the council and in a lovely area across the road from where i live

i currently rent for £650 a month ex electricity/gas so this i think is a good opportunity for me

i have a bit of money saved but only for a 20-25% deposit on a similar priced house , getting a smaller mortgage will leave more money for me for other things

any thoughts ?

You have clicked on the right thread. Shared ownership is not the way.

Read this article, read the comments. The only positive comments are from those who have just bought into it or are thinking of buying into it, all the rest of them are regrets.

Other reads:

http://www.thisislondon.co.uk/standard/article-23529109-our-shared-ownership-dream-home-turned-into-a-disaster.do

http://www.guardian.co.uk/money/blog/2010/jul/31/beware-cost-shared-ownership

Think you own your share?

http://nearlylegal.co.uk/blog/2008/09/lack-of-ownership-in-shared-ownership/

The High Court held that:
The capital payment did not purchase a half share of the property.

HappyMJ

kronenbourg wrote: »

i am well confused as who to believe now
i am seriously thinking of doing the shared-ownership thing but after reading the comments am not to sure

heres the deal if anyone is interested

value of property - 125k
value of 40% share - 50k
monthly rental repayments - £223
monthly mortgage repayments - £189

the house is a new build owned by the council and in a lovely area across the road from where i live

i currently rent for £650 a month ex electricity/gas so this i think is a good opportunity for me

i have a bit of money saved but only for a 20-25% deposit on a similar priced house , getting a smaller mortgage will leave more money for me for other things

any thoughts ?

It's probably not the best idea to ask on this thread titled "shared ownership/equity is a scam" because you will get biased responses.

As long as you are aware that new builds tend not to appreciate faster than older peoperties.

I would also base the calculations on the mortgage interest rate being much higher around 5% base rate plus the premium you are paying. 0.5% base rate will not last forever.

A 25% is quite a good deposit so I'd consider buying if you can.

Finally, when it comes to selling you need to either staircase to 100% before sale or be forced to sell through the council to anyone who is interested in shared ownership or who is willing to staircase it. A restricted market will lower your price.

HappyMJ

CheeseCat wrote: »

Well i'm due to complete on a 3 bed semi in a good area on 1st June for £75,000 so not too far away from this 'it'll never happen scenario'

and no it doesn't need complete gutting/modernisation etc. It needs between £2-4k of rendering work but I can live with that

I'm basing my statement on my area (Burton-on-Trent). If a 3 bed semi-detached freehold property came onto the market at £75,000 today it would be purchased by tomorrow.