Shared ownership/equity is a scam.

Muhasib

Lgas wrote: »

Just to add another good experience, I bought a newbuild Bellway home with my OH in March and couldn't be happier, the house is really well finished and spacious (I adore it), we have great neighbours, we are on a private estate, plenty of parking, no service charges, and we pay less per month for this 2 bed house with en-suite than we did to rent a cramped 1 bed flat. We have a mortgage for 50% of the property and intend to buy 100% as and when we can afford to, giving us the freehold. I don't feel that it's overpriced, everyone who visits comments on how lovely the houses are, and we are covered for 2 years for any faults that develop.

The nature of our jobs (we have exactly the same job) means that our wages will increase steadily over the next 3 years, so whilst we can comfortably afford it now, we will be in a good position to own 100% of it in the future, and we have no plans to move for a good while. Where else could we have paid only a £3500 deposit?!

While you might not have a service charge have you been billed in respect of the upkeep of the common areas yet?

Muhasib

brit1234 wrote: »

Exactly, its pulling people into the market who weren't in a position to buy and then getting them a property which is priced over the odds.

With such a small deposit, over priced property and falling prices you face negative equity. It may not effect you today but perhaps when you remortgage. Also there are very few lenders who recognise Shared Ownership, surely that says something.

but Lgas mentions they have shared equity not shared ownership.....

experience08

muhasib wrote: »

but Lgas mentions they have shared equity not shared ownership.....

I'm getting confused now...so shared equity is like a "real" share in the property, and shared ownership is like a lease on the property?

Lgas

Yep, the estate charge is £165.50 a year. That's to maintain all of our green areas, private roads, playground etc. I'm glad to pay it if it keeps this estate looking at good as it does now. I LOVE this house and that's all that matters to me. Similar size properties were not a lot less when I was buying and they were in worse roads/areas. I think it's a very desirable estate where we are situated.

Lgas

Yes, I have a shared equity property. This means that although my mortgage is for 50% of the property, we own 100% of the property on a 125 year lease (as with apartments). However, when we buy the other 50% the freehold will be transferred to us. The remainder of the value of the property we pay to Bellway in the form of a low interest loan (2.75%).

Muhasib

Lgas wrote: »

Yep, the estate charge is £165.50 a year. That's to maintain all of our green areas, private roads, playground etc. I'm glad to pay it if it keeps this estate looking at good as it does now. I LOVE this house and that's all that matters to me. Similar size properties were not a lot less when I was buying and they were in worse roads/areas. I think it's a very desirable estate where we are situated.

Yes but would you be glad to pay that if it doubles in the 2nd year - if you are with Bellway I presume you are with Meadfleet?

Lgas

muhasib wrote: »

Yes but would you be glad to pay that if it doubles in the 2nd year - if you are with Bellway I presume you are with Meadfleet?

We'll pay what we have to I suppose! I'd be very surprised if it doubled though. Sorry i've never heard of Meadfleet, who are they?

brit1234

Newbiescot wrote: »

Hi,

I'm looking for some advice from anyone who may have been in a similar situation or anyone with some experience in this field. I have found a property that I'm keen on, but it's a new property and as a 1st timer buyer, shared equity is the route I am going down because of LTV issues with new build properties. My issue is that the developer is marketing the home at 145000 if you purchase conventionally, but want substantially more - 160000 to base shared equity deal on. Is this a common situation or are they trying to essentially rip me off? Both values are below the 'homevalue report value, but it is definitely a buyers Market in my opinion.

Any advice appreciated before I go back to them to really discuss deal.

Thanks,

Dave

http://forums.moneysavingexpert.com/newreply.php?do=newreply&p=45493318

Above is another shared equity thread where the developer is charging £15,000 more to buy the same property as shared equity.

At least this potential buyer is realising it is a con. Others will come round as they see house prices fall, they have to remortgage and start to pay the loan back on top of the mortgage.

The loan part of shared equity is designed to manipulate land registry prices upwards and inflate the costs of their landbanks to hide their insolvencies.

brit1234

drcorbett wrote: »

Hi there.
Me and my partner are trying to sell her flat which she bought a year ago on the HomeBuy scheme. We met each other shortly after she bought it and she moved in with me into a property which I rent off my father.
We would like to buy my father out of this property because it used to belong to my grandma so has some sentimental value. More importantly however, although the propety is worth somewhere in the region of £220 to £250k, he wants us to have it for a very generous £145k as a way of providing us with a gifted deposit so we are able to obtain the mortgage we require. This has all been agreed in principal with the mortgage lender subject to the usual credit checks.
Our problem is that we cannot progress any further until we sell the flat in the HomeBuy direct scheme. We have gone through the correct procedure of obtaining permission and under direction from HomeBuy marketed the propery initially for £95k based on an average of 3 valuations which we had done ourselves. This price would also ensure that our legal costs would have been covered with some room to lower the price. The permission we obtained stipulated that we must market the property for no less than 6 weeks at a minimum price of £85k.
After 1 month at £95k then lowering the price twice it is now down to £89k after 3-4 months on the market. There just hasnt been much interest.
We wrote to HomeBuy to ask for permission to rent out the property until we are able to sell the property as the situations is financially crippling us but this was refused, even though the mortgage lender on the property were ok with it.
We are not in a position to move into the flat instead because of computing distances involved. My comuting time would increase from the current 50 mins to between 2hr30min and 3hrs depending on traffic, each way.
Can anyone suggest a solution to the problem with the flat? Is is not possible to rent out a HomeBuy property due to a change of circumstances, even though not doing is putting the mortgage of that property at risk?
Thanks in advance
Damo

https://forums.moneysavingexpert.com/discussion/comment/45526964#Comment_45526964

Another shared equity problem from a MSE viewer. I hope it works out for them. However the post shows there are also restrictive condition on Homebuy which I didn't know about. I''m not sure if it is down to Homebuy alone or all shared equity schemes. These extra conditions seem similar to the equally dodgy shared ownership ones.

First time buyers avoid at all cost.

poppy10_2

brit1234 wrote: »

https://forums.moneysavingexpert.com/discussion/comment/45526964#Comment_45526964

the post shows there are also restrictive condition on Homebuy which I didn't know about.

Surprised you didn't know about them, Brit, the restrictions you have put in bold are pretty standard T&Cs for shared ownership schemes: an exclusive period of between 6 and 12 weeks in which the property is exclusively marketed by the housing association at a set 'market value' determined by their surveyors, even if that is an unrealistic value. The restriction on renting out the Homebuy property which you 'own' is also well established. What that poster didn't mention is that even if he drops the price after the exclusive marketing period, the housing association could still have the right to 'vet' potential purchasers and could reject them if they are not felt to be suitable - potentially ruling out cash investors who wouldn't have problems with finding a mortgage.