Shared ownership/equity is a scam.

scooby75

I would use the word scam, but I would say look past the headlines.
I was looking at a shared ownership one which advertised itself as ideal for those on low incomes, first time buyers etc etc.
A 2 bed mid terrace matchbox would have required a £15000 deposit, monthly payments of £580 a month plus other costs and charges. Overall, it was 20% more expensive than it would have been with a traditional mortgage. Now I don't know many people who have £15000 to hand - I certainly don't, but I became very disillusioned with the whole scheme.

When I went to another provider, I found the payments a lot more reasonable but I was turned down on my inability to pay he monthly payments which were £50 a month more than what I'm paying currently renting (and that doesn't take into account the cheaper car insurance I would be paying or the saving in petrol in loving 35 miles closer to work). Stupid.

I_know_my_ABC_and_my_CMYK

HappyMJ wrote: »

Shared ownership is not a scam . . . . . . . Can this be stickied please?

Shared ownership reduces risks. Allows a tenant/owner to buy a larger property than they could otherwise afford or in an area they can't afford. Allows in the event of unemployment the rent portion to be paid by Housing Benefit and also allows for a simultaneous claim for mortgage interest from the DWP. Done correctly with a full knowledge of the risks involved it is fine.

It allows a low income earner with cash to spend it on a deposit and claim Housing Benefit on the rented portion. They wouldn't have got any benefit at all if they had over £16,000 in cash.

Hypothetically speaking, how would that work if a parent paid part of this and the child then rented out the bit they don't own with housing benefit.

Just curious as someone I know is doing this and hoping to receive housing benefit but I was under the impression that you cannot receive housing benefit if you rent off the parent, and especially if you live together?

Orpheo

... but shared equity tenants pay their build costs.

http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/8548591/Housebuilders-spend-1bn-on-shared-equity-schemes-to-help-first-time-buyers.html

Since the start of the current, protracted property crash the UK housebuilding industry has done its best to [STRIKE]hang self interest and demonstrate their selfless altruism by gently helping FTBs on the pwoperdee ladder where said FTBs will most certainly make squillions and one day live in a palace bought entirely from the profits of their financial genius[/STRIKE] support its balance sheets by propping up prices with shared equity and shared ownership scams.

In their desperation they are redoubling their efforts to maintain the prices of their house by selling them by the quarter, third or half and keeping the remainder for themselves with terms that clearly favour them over the tenant. Furthermore, they keep their balance sheets looking good despite only selling 25% to 50% of their houses.

It is high time FTBs said no to becoming shared equity tenants. You may not get your deposit back.

Orpheo

http://blogs.telegraph.co.uk/finance/ianmcowie/100010449/first-time-buyers-should-beware-of-builders-bearing-gifts/

vintagebakers

Me and my partner are looking at a scheme in our area. We know a few people who have brought from different schemes, some going good , some going bad. We don't have a huge deposit and because of mortgage capping we can't buy a house at 100% that we can live in basically forever.

Our plan was to rent a cheap but comfortable place why we raised a deposit but it has been hard. I wanted to buy a property we wouldn't have to move from un less we downsized because i've moved too many times for my liking.

The house we are looking at has staircasing options and other options but the simple fact is we're not under pressure to buy more in a few years time, and if we don't like the house the HA guanutees us our share back if we move in the first three years.

People on here may call it a scam, thats up to you, put in your two cents, but people have the right to make their own choices, good or bad. I certainly will be reading ALL of the small print and if i don't like it i won't buy, not moaning in the local papaer cos i jumped on the wrong band wagon.

Some SO schemes are bad - FACT - but another fact is not all of them are!

Blacksheep1979

and_another_thing... wrote: »

I will get slated for this...!!! but I really don't think the EAs over valued my flat the other week.
...
Having just had a look on rightmove, flats similar to mine in my area are selling at asking prices of over £70K what I paid in 09.

Are they 'selling at' or 'asking prices' - two drastically different things...

and_another_thing... wrote: »

Admitedly they are in slightly more desirable roads but just a few roads from where I live.

You do realise 2 streets apart can add 50% in value in certain areas...

and_another_thing...

You do realise 2 streets apart can add 50% in value in certain areas...[/QUOTE]

Would love to see actual examples of this in London where a 2 bed conversion flat has sold at HALF the price of a similar flat 2 streets away...

Blacksheep1979

and_another_thing... wrote: »

Would love to see actual examples of this in London where a 2 bed conversion flat has sold at HALF the price of a similar flat 2 streets away...

That would be 2/3 - adding 50% means one is 2/3 the value of the other as 2/3 + 1/3 (1/3 being half of 2/3) is 1. Notice you dodged the selling/asking price part of that.

and_another_thing...

Blacksheep1979 wrote: »

That would be 2/3 - adding 50% means one is 2/3 the value of the other as 2/3 + 1/3 (1/3 being half of 2/3) is 1. Notice you dodged the selling/asking price part of that.

At 10 to 12 on a Saturday night I think I can excuse myself for my poor response but yes, you're right with the maths there!
Following that the flats a few streets away should have sold for £100K more than what I paid - that would be 50% of what I paid for mine in 09, not 70K. And a similar flat sold for £275 000 recently and I notice on Zoopla another went for £250 000 last month in the street parallel to mine.
As I have said before, Shared Equity properties or not, some areas are seeing prices rises and if you wisely buy a SE property you will be OK - unfortunately you do have to share any profit but you can still make a profit. However things may well change ....

HAMISH_MCTAVISH

and_another_thing... wrote: »

Shared Equity properties or not, some areas are seeing prices rises and if you wisely buy a SE property you will be OK

That is absolutely correct.

And absolutely terrifying news for the crashaholics in this thread like orpheo, brit and poppy who are trying to scare people out of buying, hoping to create further falls in prices.