Shared ownership/equity is a scam.

HJS86

brit1234 wrote: »

https://forums.moneysavingexpert.com/discussion/3194430

Above is another shared equity horror but this time by a fellow MSE member. Sad story really, They paid about £80k with homebuy where the other flats in block sold for £51k.

http://www.houseprices.co.uk/e.php?q=WS28AE

Ban these scam schemes before anyone else gets caught out.

Hi there

The other flats sold for £51k but these were purchased in bulk by Bromford who rent them out. There weren't any other flats in the block who were purchased privately. Not sure whether this makes any difference?

thriftychap_2

Orpheo wrote: »

Pyramid schemes have winners too.

That right, and i think you will find we all agree that they are a scam!

Spartacus_Mills

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 ?

Check the terms and conditions, especially with regards to selling on and chargers.

Read the thread.

Re-read the thread.

Understand the pitfalls and the benefits (I am in the "if it walks like a scam and talks like a scam then it is a scam" group) but make your own mind up. If it goes wrong you do not want to be blaming a bunch of posters on a net forum. If it goes right, and if you go for it then I hope it does, then you only have yourself to credit.

Graham_Devon

brit1234 wrote: »

What's the monthly service charge? Usually about £100 month on top of your rent and mortgage. On top of that the service chare usally goes up with RPI which is about 5% far higher than most wage increases.

£100!?

Mines £13.11 a month.

It's also not on top of the rent. It's included in the rent and is included in the monthly rent on all literature, same as any other association I have looked at.

PLEASE. With respect, get the basic facts straight! No wonder your sums didnt add up if you were over egging them roughly 700%.

Edit: Meant to say £23.11

Orpheo

thriftychap wrote: »

That right, and i think you will find we all agree that they are a scam!

What follows are genuine questions, I'm not taking a tone, or (at this stage) attempting to prove you wrong.

What is your share of the flat?

How much, if I may be so bold, will you pocket if you manage to sell for 130K?

What, then do you intend to do with your winnings? Buy another shared ownership property? Move to somewhere cheaper? Snorting coke off of hookers' buttocks?

How will you have gained?

Wickedkitten

Graham_Devon wrote: »

£100!?

Mines £13.11 a month.

It's also not on top of the rent. It's included in the rent and is included in the monthly rent on all literature, same as any other association I have looked at.

PLEASE. With respect, get the basic facts straight! No wonder your sums didnt add up if you were over egging them roughly 700%.

Edit: Meant to say £23.11

you got lucky then if you are only paying £277, most of the people that I know that live in flats that aren't even new builds or SO pay about 1k+ a year service charge on average.

rxbishop

I'm thinking of buying a repo 80% shared ownership place for 65k. that prices it up at 81k at 100% which is cheaper than most 1 bed flats in the area and certainly I haven't seen anything as nice as the one I'm looking at for less than 90k.

The rent and maintenance on the other 16k is about £180 (Needs confirming by solicitor admittedly). That seems a lot, but considering there are maintenance/ground rents of minimum 50/month anyway on the other flats and often £100+ it doesn't seem so bad.

Only one property has sold for less than 100k within this postcode over the last 7 years (60+ odd properties sold total). Genuine question: What is the scam? I did a quick look at wiki, and it says that rent is somehow capped at 3% of overall property value per year. but 3% of 16k is only £40/month - is that the scam. Is there anything to stop them upping the rent/maintenance dramatically with no justification. I realise it'll be harder to sell, but if I can staircase up to 100% asap then I've got a bargain imo. What are the usual/common rules regards staircasing, how long before you can buy the remainder of the flat? Shame I can't rent it out though, that's a real drawback.

brit1234

Another shared ownership sad story by a MSE member.

https://forums.moneysavingexpert.com/discussion/comment/43442734#Comment_43442734

brit1234

Graham_Devon wrote: »

£100!?

Mines £13.11 a month.

It's also not on top of the rent. It's included in the rent and is included in the monthly rent on all literature, same as any other association I have looked at.

PLEASE. With respect, get the basic facts straight! No wonder your sums didnt add up if you were over egging them roughly 700%.

Edit: Meant to say £23.11

The areas I looked at were just above or just under £100 a month and this is separate from the rent. This was going back 3-4 years in Reading and London. I have seen lower service charges in London for shared ownership houses but can't understand the charge for a house at all.

Below is a link to a shared ownership property in London, all the properties show rent, mortgage and service charge cost, all 3 are combined for the total costs. Shared ownership in London service charge is in addition to rent.

http://www.firststepslondon.org/property-details.asp?PropId=2103

poppysarah

brit1234 wrote: »

Another shared ownership sad story by a MSE member.

https://forums.moneysavingexpert.com/discussion/comment/43442734#Comment_43442734

http://forums.moneysavingexpert.com/showpost.php?p=43422268&postcount=1

for the start of the thread