Shared ownership/equity is a scam.

ali82

^^ Really, I would have thought so if there was 24 hr security and gym etc but I dont think there is, I will let you know tommorrow.

I can afford £816 per month, even better at £410 if I get a lodger/friend.

Do you think it is worth it, it is a nice building, good location and close to my family and only £100 more than I am paying now plus I will have something to show for it at the end, or do you think it is still a scam?

Ulfar

My last flat I paid £96.00 a month. This included gardening, insurances, cleaning and maintenance.

You won't even get block insurance at £15.00 each a month.

Watch out for restrictive covenants on sub letting.

gaz141

the bigger the flat the bigger the service charge, i.e 2 bed flats pay more than 1 bed flats

ali82

Ok, on the list all of the flats 1 and 2 beds pay the same £150

gaz141

Oh OK, I'm buying a SO property at the mo and the 2 beds definitely pay more than I do buying a 1 bed in the development I'm interested in

gaz141

doesn't really matter shared ownership or not, I have and would avoid any property asking that amount every month, seems like dead money to me, just to line someone else's pockets. £150.00 seems a crazy amount to pay

edgex

HappyMJ wrote: »

Shared ownership is not a scam . . . . . . . Can this be stickied please?

Shared ownership reduces risks. Allows a tenant/owner to buy a larger property than they could otherwise afford or in an area they can't afford. Allows in the event of unemployment the rent portion to be paid by Housing Benefit and also allows for a simultaneous claim for mortgage interest from the DWP. Done correctly with a full knowledge of the risks involved it is fine.

It allows a low income earner with cash to spend it on a deposit and claim Housing Benefit on the rented portion. They wouldn't have got any benefit at all if they had over £16,000 in cash.

:mad::mad::mad::mad::mad:

so why dont we subsidise ALL mortgages?



in this case, the shared equity simply enables the purchaser to leverage their earnings to a greater extent than those that dont use these schemes
that means they can then 'afford' the over-inflated asking price, which of course comes with an associated inflated rent.
which pushes house prices up again, so yet more people cant afford to buy a property.

all it does is keep feeding money into the bubble


& your seriously saying that people should then claim yet more public money to help feed into the bubble?!


wonder how theyre all going to manage with the HB being cut? will their landlords reduce the rent?

gazfocus

ali82 wrote: »

I agree I thought the service...

How about let's start this again.

You must've seen the flat advertised somewhere. Can you provide a link to the advert (not the spreadsheet).

Are you looking to buy the two bed or one bed flat?

How much is the full price of the flat you want to buy?

What percentage do YOU want to buy (35%, 50%, etc)? - a word of warning, it would make better sense to buy in 10% intervals so if you're thinking of 35% I'd go for 40% because most shared ownership will say you must staircase in 10% steps.

How much deposit do YOU have to put down on a property?

How much do you earn per year?

Do you have any outstanding debts / credit commitments? If so, what?

If you can answer the above we'll be able to give you advice but the figures you've given are all over the place (one price is based on 35% purchase then deposit is based on 5% of the full price).

ali82 wrote: »

How did you work out that the amount paid off will be £10k, sorry I'm confused?

Is there an such a thing as an online calculator for SO schemes (lol sorry )

The £10,000 was a guestimate but here's the calculation:

Basically,

£58,500 x 6.1% divided by 12 = £297.38 per month - This is how much of the monthly mortgage payment goes on the interest. So £380.50 minus £297.38 leaves £83.12 going towards the actual mortgage balance.

So roughly...

Year one you will pay off £83.12 x 12 (£997.44) meaning you will owe £57,502.56.

Year two you will pay off £88.20 x 12 (£1058.40) meaning you will owe £56,444.16.

Year three you will pay off £93.51 x 12 (£1122.12) meaning you will owe £55,322.04.

Year four you will pay off £99.28 x 12 (£1191.36) meaning you will owe £54,130.68.

Year five you will pay off £105.34 x 12 (£1264.08) meaning you will owe £52,866.60.

Total you would've paid off over five years (roughly) is £5633.40.

edgex

and_another_thing... wrote: »

So what's the alternative for people in areas where property prices are greatly inflated? Where rents work out to be higher than a mortgage on a SE property? Just don't live there? Move out of London and pay £2000+ per year on commuting?
The fact is that house prices are still out of reach of most people in some areas in London. I earn above the average London salary (in excess of 40K) but I can not afford to buy anywhere decent in the area where I work. I want a good quality of life without the daily strain and stress of a long commute. I want to live in a decent home in a decent area and for now the only way to do this is through a SE scheme.
I didn't enter into this as a means just to get onto the housing ladder or to make a profit. I just wanted somewhere nice to live!!! If things all go pear-shaped in a few years then I'll cut my losses and buy/rent soemwhere else. Why does it anger so many that some people are trying to present another side to the argument?

but there isnt just a mortgage payment is there?


1) mortgage + rent + service charge
or
2) mortgage + having to buy out the rest of the equity at some future point


in 1, you have no control over the rent or service charge, & are stuffed if you decide to sell up to escape their constantly escalating charges

in 2, you have to somehow save up at least 25% of the inflated value, even whilst paying a mortgage you can just about afford

gazfocus

edgex wrote: »

but there isnt just a mortgage payment is there?


1) mortgage + rent + service charge
or
2) mortgage + having to buy out the rest of the equity at some future point

Or hope the price goes up in value and sell when the equity loan becomes payable.

I agree shared equity is complete nonsense because it means you're needing to raise the money you will owe on the equity loan but with shared ownership the rent + mortgage payment + service charge (if any, houses don't tend to have a service charge), is generally cheaper than an equivilant mortgage.

For example, mortgage plus rent for the house we're buying (a shared ownership resale) works out at £575 per month. A mortgage for the full value would be £700 per month (based on £124k purchase, 10% deposit and 5.69%).