Shared ownership/equity is a scam.

HAMISH_MCTAVISH

sturgeon wrote: »

See, you don't have much of a point there.

My first time buyer scheme clearly did not scam me whatsoever. It's massively benefitted me, my mortgage is tiny, it's allowing me to save to buy the rest of the property without having to pay someone elses mortgage. It's a great flat, very good location and it seems highly likely that besides the main benefit of having a nice place to live, that I will profit when selling.

It just seems you're bitter that in your opinion first time buyers using these schemes are keeping prices artificially high. Well I'm sorry, but without first time buyers and new homes, the property market would be significantly more static.

I bought my home two years ago and remember you trolling here then, you've clearly got a massive bee in your bonnet and you need to get over it! In your lifetime these shared ownership schemes will not go away. If you're an intelligent buyer, you'll seek out the very few first time buyer schemes that genuinely will benefit you after doing thorough research like I did. If you're stupid, you'll be blown away by the 'buy 25% of a brand spanking new home only 35 minutes train journey from liverpool st' advert. Then be roped into very hefty rent charges from day one, and won't be able to sell on the open market.

Why not aim your rants at those people? You've run out of steam

Well said.:T

cooltt

STURGEON

yes you are correct, when these schemes first came about they were a little miss leading and didn't make clear the extra costs invovled but now and for the past 2 years there have been some excellent schemes out there and as you said you simply have to do the research.

Example
Brand new city centre apartments here in Wales (i think you can guess the city) and 3 options to buy them.

Rent to buy, rent for 2,3,5,10, years then buy using the already paid rent as your deposit and the price the where when you moved in is what you will buy for!

INTEREST FREE!!! loan of 25% of value to use as your deposit

Or just buy one outright at market value.

I've read all the small print and they are practically giving them away.Deveoplers don't gain anything from overpricing properties that no one can afford.

No scams going on there

Orpheo

sturgeon wrote: »

I may be naive and wrong

This is a very good point, albeit buried in a post full of confirmation bias.

Shared ownership/equity is a scam.

Orpheo

sturgeon wrote: »

In your lifetime these shared ownership schemes will not go away. If you're an intelligent buyer, you'll seek out the very few first time buyer schemes that genuinely will benefit you after doing thorough research like I did.

You are not an intelligent buyer. You bought half a house.

Idiophreak

cooltt wrote: »

INTEREST FREE!!! loan of 25% of value to use as your deposit

Or just buy one outright at market value.

I've read all the small print and they are practically giving them away.Deveoplers don't gain anything from overpricing properties that no one can afford.

No scams going on there

The scam is, you say "oh, I'd like to take you up on this 25% interest free loan deal, please" and the developer says..."sure, but you'll have to pay the asking price on the property" - and the asking price may be 25% above the market value of the thing. They you've just given them a 25% charge on your mortgage for no real benefit.

They overprice properties so that nobody can afford them, then lend them 25% so that they can...As I said before, the only way to dodge this scam is to be 100% confident in the value of the property before you buy - and make sure you get the place for the best possible price. I found a few builders who would negotiate on price whilst still offering shared equity - but they were in the minority.

Actually, I still think it's harsh to call the thing a scam - the developers are out to make money, that's what they're in business for, so you can't blame them for trying to capitalise on the lending crisis. As a buyer, you just need to approach them with the caution you would any other seller. 5 years ago, people who take these schemes would simply have got a 100% mortgage and that was that...These days, people need to use tricks and loopholes to convince FTBs they can afford to get on the ladder without massive savings...

PasturesNew

sturgeon wrote: »

...

Short version: Single bloke working in London buys SO place and believes his salary will go up in 5 years and he'll still have a job/a better job and will have saved up a deposit to move on .... before the rent rises kick in in 5 years' time.

In 4-5 years the rent becomes 3% of the then value. So, if your place DID double in value, and if your salary didn't increase, would you be up !!!!!! creek without a paddle? I've no idea of your share/value, so can't guess the figures.

Most problems come due to change of circumstances and having to move ... and a lack of buyers who can meet criteria/borrow.

Oh - and yes, I bought a SO once, an early prototype 20 years ago... 7 years after buying it (peak prices) I sold it (just after the bottom) and was still in 5% negative equity, which I had to pay in order to sell. Of course I had no idea there was a house price crash on back then as there wasn't the media that there is now, just 2 short news programmes on a portable TV twice a day if I watched them.

Turnbull2000

Yes, shared-ownership sucks. Yes, it's designed to prop up prices. Yes, it's largely to the benefit of developers and land owners. But it's the only 'assistance' the government is going to provide, as mass house building and lower prices are the last thing they want to see. The only choice for first-time buyers is to live with the sh*t card you've been dealt and get on with it, otherwise you'll be forever moaning.

Hanky_Panky

Not sure I can see what all the fuss is about.

I bought a shared ownership house in the mid 80's - great scheme for me at the time and gave me my first foot on the ladder in a house much larger than I could otherwise have afforded.

Egg_custard_2

A fair number of people on the thread have said that SE/SO are keeping house prices propped up. I don't think house prices are that high at the moment - the 'bottom rung of the ladder' houses seem to me to be as affordable in comparison to wage levels as they were when I bought my first house nearly 15 years ago.

The difference is the increase in the percentage deposits required, and the banks' general caution in lending. SO/SE has become more popular because it helps to reduce the amount of deposit required. For a FTB at present, the monthly mortgage repayments are not such an obstacle as getting together the initial lump sum. That would've been a big problem for me 15 years ago if I'd have needed more than 5% deposit.

If house prices are being 'propped up' there's probably more winners than losers out of it. There's already a large number of homeowners in negative equity due to buying at the peak of the housing market. If prices fall further, negative equity will become a much bigger problem than it is now. Existing homeowners stand to lose more through prices falling than FTB wannabes lose as a result of prices stagnating.

and_another_thing...

I'm so glad this thread has reappeared as last week I had my Shared Equity flat valued. I know estate agents tend to inflate property values and that a place is only worth as much as it sells for at the end of the day but three separate agencies have said they would market my flat at between £35000 and £40000 more than I paid for it in 2009. When I bought my flat a stipulation was that I HAD to have a deposit though it wasn't as much as if I was buying 100%. I paid 15K then as a deposit and have obviously not lost that as not likely to be in negative equity. I am considering selling and buying with my partner and if I hadn't entered into a SE scheme when I did but carried on renting I would not have as large a deposit to put towards our joint purchase. With our two salaries my partner and I will be in a position to buy on our own.
Of course I may just decide that I prefer living on my own for the time being anyway!We'll see.
Not boasting just presenting a positive view as always.