Shared ownership/equity is a scam.

WelshNic

It's not a complete scam you old drama queen - it's worked well for many people out there.

poppysarah

WelshNic wrote: »

It's not a complete scam you old drama queen - it's worked well for many people out there.

I do think it sends out a depressing message to the young though .. whilst it works for a few for most people it is just reinforcing the fact they are priced out.

WelshNic

You make it sound like it only works for a minority, now that is depressing.

Providing people are sensible with what they're borrowing and realise that they may have to make some sacrifices to own a home, it is doable - esp when these schemes are made use of.

As with all things it's buyer beware/read the small print but to just shout scam at every given opportunity is simply ridiculous.

FTBFun

brit1234 wrote: »

Rival tread below on Shared ownership trying to make it sound good.

https://forums.moneysavingexpert.com/discussion/3453017

I think the evidence from this thread shows that it is a complete scam.

Like you ever need evidence to make your ridiculous arguments.

brit1234

Firstbuy Con

We have long known that new builds are very over priced. However we are now having more MSE members saying shared equity schemes such as firstbuy are being sold cheaper if you buy normally.

kiki* wrote: »

Plus just to add another thought, they are pricing them so high to start with! We were told it would be a cheaper asking price if we didn't use the scheme!

http://forums.moneysavingexpert.com/newreply.php?do=newreply&p=46578697

This is the second MSE member I have seen in the last couple of weeks. So rather than shared equity being affordable housing it is in reality highly over inflated housing. The scheme isn't about helping first time buyers but the developers only.

So if you don't want to be milked and conned by the developers avoid firstbuy.

St00zer

brit1234

FIRST TIME BUYER STRIKE MEMBER refusing to buy till sellers price realistically.

What would you class as a realistic price for a house? 50% below current value?

How much of a deposit have you saved up & what kind of property could you realistically afford at current prices?

How much money do you spend a month by renting?

and_another_thing...

brit1234 wrote: »

Firstbuy Con

We have long known that new builds are very over priced. However we are now having more MSE members saying shared equity schemes such as firstbuy are being sold cheaper if you buy normally.



http://forums.moneysavingexpert.com/newreply.php?do=newreply&p=46578697

This is the second MSE member I have seen in the last couple of weeks. So rather than shared equity being affordable housing it is in reality highly over inflated housing. The scheme isn't about helping first time buyers but the developers only.

So if you don't want to be milked and conned by the developers avoid firstbuy.

This post is, as always, misleading and SHOULD read:
'So rather than Firstbuy being affordable housing it is in reality highly over inflated housing'

FIRSTBUY, NOT shared equity in general.
Very misleading.
Not all shared equity schemes demand you purchase a new build as I have said time and time again...

Lara44

We bought a part of shared ownership property in 2010. It was a housing association resale, of a very nice 1970s 3 storey 3 bedroom house. The combined monthly rent and mortgage are around the same as we would pay for a nice 1 bedroom flat in the same area. My OH works from home so he has one bedroom as his studio, so he doesn't have those costs to pay. Our service charge is £14 per month, which is simply to cover the buildings insurance. My OH being freelance was one of the biggest obstacles to buying on the open market following the recession. We are not yet sure whether to staircase to full ownership or overpay on our mortgage. As others have suggested staircasing can make a property less inviting to re-sale buyers.

We looked at a lot of the new build schemes in our area, and concluded that they were overpriced - and actually not very affordable at all once the extortionate service charges were added. The flats were small with no increase in living space between 1 bed and 2 bedroom apartments. They were not well-designed with lots of square footage wasted on wide corridors and weird shaped bathrooms while 'open plan living' means a couple of units stuck on the end of your living room.

I would advise anyone interested in shared ownership to make a list of all housing associations in their area and keep in contact with them about *older re-sale properties*. I would avoid new builds, (or new build re-sales) like the plague. Different HAs have different contracts - our rent is much lower compared to other HA schemes. Check out ALL the details. Make sure it is right for you. If you can hold on to buy on the open market then do. Our valuation came from an independent assessor unlike some schemes where HA officers are used. SO seem to favour London residents where rentals are expensive (and in my experience short-term and inadequately managed).

There is a good deal to be had from SO, but only on a tiny minority of the properties. While I disagree that it's a 'scam' you have to be very careful indeed.

St00zer

Lara44 wrote: »

We bought a part of shared ownership property in 2010. It was a housing association resale, of a very nice 1970s 3 storey 3 bedroom house. The combined monthly rent and mortgage are around the same as we would pay for a nice 1 bedroom flat in the same area. My OH works from home so he has one bedroom as his studio, so he doesn't have those costs to pay. Our service charge is £14 per month, which is simply to cover the buildings insurance. My OH being freelance was one of the biggest obstacles to buying on the open market following the recession. We are not yet sure whether to staircase to full ownership or overpay on our mortgage. As others have suggested staircasing can make a property less inviting to re-sale buyers.

We looked at a lot of the new build schemes in our area, and concluded that they were overpriced - and actually not very affordable at all once the extortionate service charges were added. The flats were small with no increase in living space between 1 bed and 2 bedroom apartments. They were not well-designed with lots of square footage wasted on wide corridors and weird shaped bathrooms while 'open plan living' means a couple of units stuck on the end of your living room.

I would advise anyone interested in shared ownership to make a list of all housing associations in their area and keep in contact with them about *older re-sale properties*. I would avoid new builds, (or new build re-sales) like the plague. Different HAs have different contracts - our rent is much lower compared to other HA schemes. Check out ALL the details. Make sure it is right for you. If you can hold on to buy on the open market then do. Our valuation came from an independent assessor unlike some schemes where HA officers are used. SO seem to favour London residents where rentals are expensive (and in my experience short-term and inadequately managed).

There is a good deal to be had from SO, but only on a tiny minority of the properties. While I disagree that it's a 'scam' you have to be very careful indeed.

Lara - I thin that is a sensible post, I don't disagree with much of what you have said.

A clever way of getting a low service charge as well as the benefits from SO by buying re-sale properties.

New builds are overpriced whether it be SO or open market but they also require less maintenance like an old 70s property would. Afterall buildings on land's depreciate, but property prices increase as the value of the land has increased.

New Build properties that have sound proof, double glazing, high tech installation points for broadband, sky tv, shaver sockets etc come at a premium.

I think the service charge on London flats start on atleast £100/month for so providing the service charge on SO is close to this figure then it is not so bad. And if the service charge is £200/month but the rent is heavily subsidised and the total costs are less then what it would cost to rent on the open market then it is also not so bad.

Matt_hw

I would like to say thank you to those who have posted on this thread as you have really helped me make a decision.

Shared equity schemes such as Firstbuy are such a temptation as they paint such a pretty picture. You can afford to buy a brand new property after all.

For those who have waited a long time to get on the housing ladder, the temptation becomes greater and greater to go for one of these schemes.

To be honest I think it's a matter of biding your time. These schemes will fool people into buying them and I personally think that it is gravely irresponsible.

I am an accountant earning a good salary and I have no dependants. I really feel for those on low salaries with dependents.

I had been looking at a one bed apartment in an Oxfordshire village for around £168k. You cannot negotiate on the list price outlined by the developer.

What I had noticed is that there was a two bed apartment available around the corner from the new build site at a price of £145k. This could not be shifted at this price, so the new build properties are clearly severely overvalued.

You are also attracted in by decent mortgage rates. Under this scheme you are eligible for Nationwide's 75% LTV mortgage range. I could have got a five year fixed deal at 3.89%.

The mortgage deal would have been great but I just know that I would be in negative equity straight away regardless.

There is clearly a lack of social/council housing in this country. Developers have to allocate a certain number of properties for this purpose on the site I believe. The most needy people will be living in these areas. As a result there will be a real mix of people living on a single development. Surely this is social engineering?

I have decided to remain in my houseshare for the time being and carry on saving until prices do reach an affordable level in order for me to be able to afford on the open market.

There are conflicting messages coming out regarding house prices. Some say that due to a lack of supply, prices will rocket 20% in the next five years.

I personally think that prices will continue on a steady decline until banks loosen their lending requirements across the board. The number of 95% mortgages available are limited at the moment. The ones that are available have incredibly high rates attached to them also.

The current housing system simply does not work and I fear that it will break soon. If it does it will cause untold misery, but this will be as a result of failed policies by successive governments.