Shared ownership/equity is a scam.

poppy10_2

Another victim, this time from soming who was actually in a good financial position and hoping to staircase to 100% ownership:
https://forums.moneysavingexpert.com/discussion/3511313

We have worked out that had we rented for the past four years... we would be significantly better off (to the tune of about £15 - 20k) and would now be able to put down a deposit on a property of the same value with ease. Instead we have be forced to ask parents for a loan to cover our fees.

...this is despite our household income increasing by over 50% in 4 years, having saved, having put a 10% deposit down initially on our share, overpaid our mortgage, having a perfect credit history and a mortgage with the same terms being only slightly higher per month (about £80) than our current rent and mortgage combined. On top of that we have now discovered that despite technically still being first time buyers, we are liable for stamp duty when we buy over the £125k threshold in our home.

How anyone who hasn't been as fortunate as us will ever be able to staircase, in the face of rents rising above inflation is beyond me. Remembering that we are possibly unusual for people buying shared ownership prior to 2008 because we did have a 10% deposit. Whilst anyone who bought for the first time at the same time as us, is likely to have the similar issue even if they bought a full property, shared ownership buyers are at a significant disadvantage if their circumstances change or they are unable to sell, because they can't rent the property or sub-let a room if they need to. Its a real trap. The government should not be pushing shared ownership until some of the legal issues are addressed and more flexibility is available to help shared ownership buyers, should they wish to move or staircase...

Our staircasing experience is proving a nightmare.

Idiophreak

Matt_hw wrote: »

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.

Just in case people read over this thread at some point, I thought I'd correct a couple of things.

1) You *can* negotiate on the list price. They might say you can't, but that doesn't mean much until you give them an actual offer. They might think they hold all the cards - but they need buyers as much as you to buy the place.

2) Not all properties are created equal. There are 2 bed flats on the same street as my 2 bed flat, but for 70% of the value, if that. The difference is that whilst mine's a nice, large flat in nice grounds the others are tiny pokey little things in tower blocks.

New builds are....optimistically priced, you might say - but just seeing the price for other properties doesn't tell the whole story...And don't forget that a house being new does actually have a quantifiable value in itself.

Mind_Overload

I have taken the advise from others on here and going to dump a healthy sum of money I have saved off my 50% share - this has really got my mortgage moving in the right direction now, I can now look at mortgages at 75% LTV which have much better fixed rates:j

This has got me thinking though, I want to try and pay my 50% off as quick a possible, but that could be 15 years away. If I stay here for a long time i might end up getting a mortgage on the other half, but it will be way way higher then the price I paid for it in 2007, this could be a big blow later down the line if im still here, anyone else thought this through?

brit1234

redbeard2000 wrote: »

A few years ago I bought a 50% share of a housing association flat. I've been paying rent on the other 50% and the flat's service charge.

I've decided to sell because I can afford now to buy 100% of another property. My main question is, is the estate agent entitled to charge their fee on the full asking price? I don't understand why, because I'm only selling my half. It's the difference between paying 1.75% on £130k (the full value of the flat) or 1.75% on £65k (my half)!

So far I'm not enthused about the whole selling procedure. According to the lease, I also need to pay into the housing association's maintenance fund when I sell - this is calculated at 0.5% of the FULL value of the flat, multiplied against EACH year I've lived there (currently 3%). On top of this, the housing association charges £200 for the classic 'admin charge'.

I need to get out though because my 'subsidised' rent on half of the flat is nearly as high as rent on an fully let one. Also, the service charge just went up 25% even though the management company has not filed accounts for the past two years.

https://forums.moneysavingexpert.com/discussion/3527347

Another example highlighting problems with shared ownership. Thread link above.

poppy10_2

One more victim:

Trapped in my flat by huge service charges...!!

I have a shared ownership flat in Preston that is half owned by me the other half by the housing association and i've been trying to sell the flat for 3 years but in this time the service charge has gone from £60 a month to £215 a month as the housing association believe that works are required in the near future to fix various issues with the block and fit new windows so i can't afford to live here any more.

The problem is that due to the excessively high service charge no one will buy it even tho everyone that comes to veiw it is keen to buy until the service charge is explained.
I've been to the LVT and they sided with the housing association so i'm stuck here.... i've even offered to sell it back to them at a cheap price or even give it to them leaving me with a £20,000 debt but they refused.
I can't even walk out on the place as they said they would chase me for the service charges while the flat is empty anyway by charging my mortage company who will then pass the charges onto me....

I'm at my wits end... this is consuming my life and i feel like i'm trapped here forever..... my life is on hold...!

Has anyone any experience of this type of treatment from a landlord especially a housing association, they are supposed to help low income people aren't they..?

brit1234

Another sad shared ownership thread where the buyer thought it was better than renting but turned out worse.

morgan1967 wrote: »

We are in a shared ownership property.. our mortgage is for 90.000 ( 35%) and our monthly repayments are £823.46 a month, plus £350 a month rent.
We are supposed to be in affordable housing! We agreed to a high interest rate with our mortgage company for a 3 year period to get ourselves out of rented accommodation and onto the property ladder. But as the recession hit and being self employed the repayments became erratic, so even after the three year agreement the mortgage company would not let us have a reduced rate.

We have fallen behind in repayments with literally everything now and cannot even afford to buy food.....we have a repossession order over us and MUST make the repayments ( inc arrears) each month on the dot or we will be evicted.
We desperately need a lower rate as its now at 10% and we just cant afford it.... we have considered selling and privately renting although the rent will not be that much less than what we are currently paying as we live in an expensive area. we are also worried we wont be accepted as we now have bad credit rating.
Can any one please tell me if they know of any way of getting our mortgage company to reduce the interest rate?

http://forums.moneysavingexpert.com/newreply.php?do=newreply&p=47651465

FTBFun

brit1234 wrote: »

Another sad shared ownership thread where the buyer thought it was better than renting but turned out worse.



http://forums.moneysavingexpert.com/newreply.php?do=newreply&p=47651465

How is this a "scam" exactly?

poppysarah

FTBFun wrote: »

How is this a "scam" exactly?

Selling someone the idea they should buy half of something because a whole one is overpriced is insane for housing.

It might work with food - buy half a chicken rather than a whole one...
but for housing it shows the system is broken.

FTBFun

poppysarah wrote: »

Selling someone the idea they should buy half of something because a whole one is overpriced is insane for housing.

It might work with food - buy half a chicken rather than a whole one...
but for housing it shows the system is broken.

Oh I'm no fan of shared ownership and wouldn't touch it with a bargepole.

But this isn't a scam IMO.

Idiophreak

brit1234 wrote: »

Another sad shared ownership thread where the buyer thought it was better than renting but turned out worse.



http://forums.moneysavingexpert.com/newreply.php?do=newreply&p=47651465

Sorry to say it, but there are plenty of threads around where people can't afford to pay their mortgage and damage their credit rating. This has more to do with the recession's impact on their income than it does shared ownership...(and how paying more interest was going to help them in anyway, I just can't imagine..)