Shared ownership - is this correct?

tonynz

So let me get this straight.

I can pay from 25%-75% of the property.

For a £300,000 apartment, I have to mortgage anywhere from £75,000 to £225,000

Let’s say if I agreed to a 50% shared ownership – I take out the mortgage of £150,000 (repayments would be about £800)

The govt/council own the other £150,000; I also pay rent – so since I own 50%, I only pay half of the rent. Hence if the rent for the apartment is £1200pm, I would only pay them £600pm?

At any time I can buy more share back.

Is this approximately how it works?

hazyjo

I think you'll find you'd also be responsible for 100% repairs, maintenance, etc.

Don't think you can just sell to anyone... but someone else would have to clarify. Think the part-owners have a list or set a price or something. Sorry, not familiar with it but have read so many negative things about it on here it's not something I'd have touched with a bargepole. As far as I can see, it's just inflating house prices.

Jx

Blacksheep1979

Also prices tend to be a touch higher than non shared ownership properties.

DannyboyMidlands

Like hazyjo I wouldn't touch shared ownership with a bargepole. Far too many conditions attached.

Polmop

I am not sure but i would have thought the rent on the other 50% would be the rent due ie £1200 rent would be on the 50% or £2400 on 100%

Graham_Devon

Approximately right yes. There will also be service charges. I am in shared ownership myself, and it's worked very well for me so far. However, I'm not in a flat and wouldn't reccomend an SO flat.

Bit of a minefield though, you really need to do your research before you think of going ahead, and then think again.

Orpheo

Shared ownership is a scam.

Doubtful_Guest

The OP has basically got the right idea. We're in Shared Ownership flat and we're pretty happy with it. There's pros and cons to it though and I think there are a few threads on here that go into that in greater detail. It probably does inflate house prices a bit. However, for us, it was a way to get out of a really horrible damp flat into a much nicer one in an affordable way. It also gives you peace of mind that you have a permanent home and are no longer subject to the whims of a landlord who might sell your home from under you or terminate your lease to move a member of their family in to it instead (that happened to me once ). It's not much good if you're trying to climb the housing ladder or make money on it, although you probably won't lose too much either since any loss in value is split with the Housing Association that owns the rest of the home. It probably suits you if you want to stay in the same place for a while and just want a decent affordable place with some security.

Drysdale

I have lived in a shared ownership flat for the past 3.5 years. Mine is 50%.

At the time of buying, I purchased half of the flat for £75k (Outright valuation for 100% was £150k) and a housing association owned the other half and I pay rent to them.

With selling in future, you can sell the property to anyone and market it with anyone. You just need to let the housing association/council know that you are selling. You can market it at whatever you like but just keep in mind that the housing association are entitled to a percentage of the sale price based upon the percentage of the property that they own.

You can also sell it on the terms you bought it i.e. you can sell it as a shared ownership - selling your percentage of the property and advertising that it is shared ownership and they will also need to pay rent on the rest of the property to the housing association.

Remember though that just like you needed to apply to the housing association for renting the rest of the property, they will need to do the same.

I have found it extremely difficult to sell my property - I've had 4 viewings in 2 years!

brit1234

There are lots of stories with people not able to sell shared ownership, with all their dodgy conditions. I too have lots of friends struggling with different issues relating to them. As a key worker they are focused on us to buy so lots of my colleagues have and they have all regretted it. Not all and once but even the last person to really recommend it has changed his mind in the last year after issues with the electric and who is responsible for the repairs.

Personally as others said I wouldn't touch with a barge pole.

starlight_xx

I rented my previous flat from someone who had shared ownership of it and she said it was the worst thing shed ever done.

She owned 25% of the flat. The Housing !!! did things like replaced all the windows of the other flats in the block, but wouldnt do mine, they replaced all the other kitchens, except mine, and she was constantly being hit for bills for her share of repairs. The HA seemed to treat it as if she owned the whole flat.

Once I moved out she had one hell of a fight to get the place sold, the HA initially wouldnt buy her share and obviously selling a 1/4 of a flat was almost impossible. The flat lay empty for 6 months until finally the HA bought it back for less than her original outlay