Shared ownership/equity is a scam.

clairecymru

poppysarah wrote: »

It was a gamble. If it's paid off then you are incredibly lucky. Where in the country are you?

Cardiff

FTBFun

brit1234 wrote: »

Hamish house prices are falling and set to continue falling what ever you say. I just don't want other people to get trapped in this shared ownership scam scheme like my friends and all their problems they are having.

London has a 5% YOY rise, 3% MOM.

How is that "continue falling" for you, then?

big_john_studd

We have 70/30 homebuy direct. We have just got a new cheaper fixed rate for 3 years and also adding 10% to the mortgage. Next year will be paying off another 10% with sharesave that comes to an end and a small loan. Neighbors down the road paid 213k for house 1 year before we bouhgt ours for £164.

Only downside with staircasing seems to be the independant valuation on the property (£120) and solicitor fees of about £300+VAT.

brit1234

From a thread today where multiple shared equity owners are having problems selling. They can't price competitively as they will have no equity to move on. The costs of the homes are way over the competition.

https://forums.moneysavingexpert.com/discussion/3318128

This is another example of the shared equity time bomb and they are yet to feel the force of the main charge when they have to repay the interest loan on top of the mortgage.

If you ever want to move again or get a bigger home when you start a family avoid shared equity. It seems desperate or financially illiterate people with no deposits go for them.


Shared Equity Time Bomb

ces59

Hi

Absolutely new to this. I have been looking for apartments with my daughter. We are gifting a deposit but even with a fairly generous deposit it seems the only way to go is shared equity - the builder will offer a 15% interest free loan. The apartment is the last one on the site and they say they have reduced its price anyway - they have carpeted and curtained it. I asked why it has not sold and apparently it has sold 5 times but for various reasons - mostly personal to the buyer it has not completed. I still think it is overpriced but the location is great. I am just worried that the price will go down over time.

I am now trying to get my head around the possible pitfalls. I cannot see my daughter living there for more than 5 years. She is a teacher so her income is not going to rise dramatically. She may or may not have a partner to help in the future but you cannot depend on that.

Has anyone got any advice?

HAMISH_MCTAVISH

ces59 wrote: »

Has anyone got any advice?

Yes.

Don't listen to the advice of anyone on this board that hasn't actually experienced shared equity first hand, or that claims it's a scam because they want house prices to crash.

poppysarah

HAMISH_MCTAVISH wrote: »

Yes.

Don't listen to ...

HAMISH_MCTAVISH thinks the higher house prices get the happier he will be.


Take a balanced view.
Read everything you can. Get lots of people's opinions.

Muhasib

in the thread that Brit1234 links to wouldn't Lido33 have a problem anyway in moving because of the fall in value whether they had used the LIFT scheme or not?

HAMISH_MCTAVISH

poppysarah wrote: »

HAMISH_MCTAVISH thinks knows the higher house prices get the happier he will be.
.

Fixed that for you.

But it doesn't change the fact that you give relentlessly bad advice and should be ignored on the topic of shared equity.

Muhasib

ces59 wrote: »

Hi

Absolutely new to this. I have been looking for apartments with my daughter. We are gifting a deposit but even with a fairly generous deposit it seems the only way to go is shared equity - the builder will offer a 15% interest free loan. The apartment is the last one on the site and they say they have reduced its price anyway - they have carpeted and curtained it. I asked why it has not sold and apparently it has sold 5 times but for various reasons - mostly personal to the buyer it has not completed. I still think it is overpriced but the location is great. I am just worried that the price will go down over time.

I am now trying to get my head around the possible pitfalls. I cannot see my daughter living there for more than 5 years. She is a teacher so her income is not going to rise dramatically. She may or may not have a partner to help in the future but you cannot depend on that.

Has anyone got any advice?

Will you have 100% ownership despite the 15% loan or is it 85/15?

What are the other properties now paying in service charges and ground rent already?

Who are the managing agents - google the name to see if any other developments have complaints from leaseholders about their management of blocks.

Check all the land registry sales for addresses in the same block and then compare the prices to comparable size and type of properties in the local area, google the address and also the development name as well to see if anything comes up about local shared ownership schemes with social housing providers in the same development - quite often there will have been a press release still archived if this was so. Another tell for this is that on land registry for partbuy/part rent the sales price will reflect the purchasers equity stake (although not always).

If it appears priced in line with the local alternatives and you go ahead before giving the buying signs to their sales team see if you can get built in wardrobes and appliances included as well - secondary consideration but worth pushing for.