Shared ownership/equity is a scam.

richardw

brit1234 wrote: »

...paying all the costs with a fraction of the ownership...

Do you mean, say if you bought 50% share of a leasehold flat, you wouldn't be going halves on say something like the building insurance?

Emily53

I'm sure I'm not the only one, but I dont see many posting here. I am a very happy shared owner of a tiny Victorian house in W.London. Having suffered decades of exploitative landlords and freeholders, I took advantage of the scheme when it first came out, in the mid-90's.
I was intending to start a family at the time, and could not believe my luck when I realised that the scheme would allow me to afford a real house, with a real garden, and be affordable enough for me to reduce my working hours when the family came along.
That is exactly what happened. The kids are now approaching time to move on, and I am still in a house I love and would never have been able to afford otherwise. I have improved it a lot, but as I see it as a home rather than an investment, it matters little that the Housing Association that co-owns it will benefit if / when I sell. The sums are already insignificant compared to the rise in value.
Of course everyone should examine the terms of their agreements carefully, but dont turn your back on this scheme just because of the mad ranting of a few zealots!

Peeky_Joe

Brit1234 someone really needs to stop you peddling your opinion as fact. I see just in the last few pages a poster was considering backing out of a house purchase on your advice. Are you a financial advisor? It doesn't say so in your tag line.

Idiophreak

Peeky_Joe wrote: »

Brit1234 someone really needs to stop you peddling your opinion as fact. I see just in the last few pages a poster was considering backing out of a house purchase on your advice. Are you a financial advisor? It doesn't say so in your tag line.

No, brit's just an angry dude with a vested interest in stopping people buying homes...

Idiophreak

brit1234 wrote: »

Another shared equity bad experience by an MSE member.

https://forums.moneysavingexpert.com/discussion/3885959

No, brit...this is another *negative* equity bad experience.

As for "I have 3.5 years to save 50k" :wall: :wall: :wall:

They've got 3.5 years left. They've had 6.5 years already! And, really, they only *have* to save enough to cover their share of the negative equity, then they can walk away. It's a bit of a waste of 10 years, for sure...

Peeky_Joe

Idiophreak wrote: »

No, brit...this is another *negative* equity bad experience.

As for "I have 3.5 years to save 50k" :wall: :wall: :wall:

They've got 3.5 years left. They've had 6.5 years already! And, really, they only *have* to save enough to cover their share of the negative equity, then they can walk away. It's a bit of a waste of 10 years, for sure...

This is my biggest ball ache with this. Do people really believe that the interest free element is a gift (as mentioned by another ranter!)? Idiots like that should not be trusted with a mortgage. It really is eye wattering how financially niave some people are. What part of 20% equity LOAN do they think is a gift?

brit1234

Peeky_Joe wrote: »

Brit1234 someone really needs to stop you peddling your opinion as fact. I see just in the last few pages a poster was considering backing out of a house purchase on your advice. Are you a financial advisor? It doesn't say so in your tag line.

This is money saving expert website with the aim of saving money for the user. Shared ownership and shared equity are schemes designed for people to borrow more for over inflated properties. I am simply pointing these issues out. I am not a financial advisor or pretend to be one. However I do have a degree in risk management and have been studying economics for a fair few years now. With schemes like this there are issues and these should be pointed out to people so they can get a balanced view when buying. They will not get the negative side from the sales person.

You yourself are having issues with shared ownership I see.

Peeky_Joe wrote: »

Me and my wife bought 35% of our property in June 2006 through shared ownership. The property was a new build, and we got a 100% mortgage - as it turned out, one of the last as the property market fell off a cliff around two months after we completed.
Anyway, that's the background. I never saw negative equity as a big issue really as it only becomes a problem when you need to move/remortgage etc. Well the need to move is fast approaching. We now have a daughter and in the coming 14 months she will be starting school. Gaining access to better schools being the main and most pressing need of many to move.
We knew when we planned to move that we couldn't afford the deposit on a new property, so had decided to sell our flat and rent a house. Based on my most recent mortgage statment and a conversation had with an estate agent regarding the valuation, I am in approximately £10k of negative equity on just my share, without taking into consideration estate agent fees, legal costs etc. While we have some money available, we don't have anything near that kind of figure. So what do we do? Are we stuck here?
My first thought was to sub-let our flat, without informing the housing assocoiation or my mortgage company. Although I'm now more reluctant to go down this road, it appears it's that or staying put.
This rock and hard place isn't very comfortable!! All thoughts and/or suggestions welcome.

• You have bought an overpriced property and now in negative equity.
• You need to move yet shared ownership is far harder to sell
• You want to rent it out but the restrictive shared ownership conditions stop you, so you are considering illegally renting it out risking being credit black listed and worse.

Shared Ownership does not help first time buyers to step up the ladder and can strangle young families. I have friends in the same situation and the children issue and need to move is frustrating as they are trapped in a SO property.

richardw wrote: »

Do you mean, say if you bought 50% share of a leasehold flat, you wouldn't be going halves on say something like the building insurance?

No full costs. Shared ownership leases you liable on many aspects as you are responsible for all the costs and a fraction of the benefits.

As I said before the government has stopped funding these schemes and the housing associations are going mad over this lobbying like mad through their spokes group the Housing Federation.

Idiophreak

brit1234 wrote: »

With schemes like this there are issues and these should be pointed out to people so they can get a balanced view when buying. They will not get the negative side from the sales person.

You know the phrase "two wrongs don't make a right"?

I think "two unbalanced arguments don't make a balanced argument" kind of works, too.

richardw

brit1234 wrote: »

No full costs. Shared ownership leases you liable on many aspects as you are responsible for all the costs and a fraction of the benefits..

So if your fraction is more than a half, you're more likely to benefit, and if less most likely to benefit much less?

Idiophreak

richardw wrote: »

So if your fraction is more than a half, you're more likely to benefit, and if less most likely to benefit much less?

I think you're misunderstanding.

If you're in shared ownership and the boiler blows up, you'll find that you're very much responsible for fixing that yourself and paying 100% of the cost, irrespective of the proportion of the property you own. So you bear the brunt of costs.

But then think of the normal benefits of home ownership:
* Stability
* Ability to change the house as you want
* (hopefully) profits from sale

With shared ownership, you get stability, but you're not free to change things as you wish and you don't get all the profits from a potential sale...so you have a "fraction of the benefits"...