Shared ownership / Part exchange advice please!

SazM030306

We've been looking at houses to buy, and have seen one that we would love to live in, and couldn't afford but it is shared ownership, and the price offered is well within our budget. How does this work? Is it advisable?

The other one we have seen is offering part exchange. Don't these normally give you a lot less for your house? Opinions welcome

Thanks, Saz.

Richard_Webster

If it is new build beware!

Builders often have to build a proportion of dwellings for "affordable housing" and these get sold to HAs for the full market price and then passed on for 50% or whatever percentage to buyers.

Private buyers on the same estate get a discount but still pay over the odds for the full 100%. When you come to sell your 50% may not be worth as much as you thought.

So if you are buying SO buy second hand because the prices are more realistic.

However big point is whether you qualify for SO in the first place. Normally you have to have some keyworker or similar status to get on HA list for such properties.

SazM030306

Thanks Richard. The part ex one is this one.. http://www.rightmove.co.uk/property-for-sale/property-18718887.html;jsessionid=51B394170C5D31ABBC29D0FDCD8ADEC3 so it's not a new build, or on an estate.

This is the SO one.. http://www.rightmove.co.uk/property-for-sale/property-29827159.html?premiumA=true

Richard_Webster

This is the SO one.. http://www.rightmove.co.uk/property-...?premiumA=true

So its newish but secondhand.

Issue could be whether you qualify for SO? Do you qualify as a "keyworker"?

Sellers of SO properties often don't realise they usually have to offer it through the HA first to those "keyworkers" etc on HA's list, so happily put it on the market with an estate agent and then find they can't sell to any private buyer, so don't assume that just because the agent shave it you can buy it!

Of course the sellers may have found nobody wanting it through HA but if they never asked the HA first then you can't normally buy it on the open market.

SazM030306

Aah I see, probably not. Thanks for explaining.

Richard_Webster

So your only hope is to ask the agents if it has been offered first through the HA with no takers. If it has you are in with a chance, but this is unlikely.

jamie30drums

I sold my shared ownership property in London recently (thankgod) and I want people to be aware of the many "hidden" financial charges and more importantly the STRESS of shared ownership. Here are the main ones.
1) If your looking at a large block of flats/development in a city, I wouldn't go near it in a million years. Firstly look at the surrounding area! its normally in a rough area.
Probably part of your block or development is for social housing (government policy)and private renting, here is where the problems lie. You will take great pride in your house or flat but this will not be shared by others who have no investment (social housing/rent). At first you area will look just like the "Artists Impression" but rest assured it will go rapidly down hill. How do you like rubbish/graffiti in the communal areas,endless phone calls with the token laminate "do not leave litter" signs. Some of my work colleagues have shared ownership properties (canary wharf/shoreditch) and all have experienced the same problems (fire in the lifts/car crime/threats of violence, and a stabbing). You need to feel safe in your home and I never did. The bigger the development the worse your problems. I have been in many shared ownership properties through my work and, ALL are disgusting in the communial areas and filled with some real scum.
2) when you sell (if you can) , you pay estate agents fee's on the WHOLE property not just your share, which will be a good 3-4 thousand plus valuations fees 120 pounds every three months (if its not selling), solicitors fees and many other charges(stamp duty, even though my share was much smaller than the threshold, and then your supposed to make some money on your tiny share.If you stair case, expect to part with a few grand and have your free time taken up being a mediator between all parties. Because shared ownership involves so many departments (your mortguage provider, the shared ownership organisation, your soliciter, your buyers soliciter, you will spend forever trying to keep the selling process on track, It took me 7 months to sell and I had a buyer from the start (who nearly pulled out due to the time it was taking)
3) We had different organisations to do maintainece and they did the minimum, for example, paint was sprayed up an exterior wall, i asked if they would clean it off they said "we don't do that sort of thing" I said thats ok I will do it, to which they replied, "sorry your not allowed". You will pay at least £100 pounds a month in communal charges for the pleasure.
This is a snap shot of one of many many similar problems that i experienced over the years.

My advice, if its a big development in a city, DON'T go near it.

SazM030306

Thanks for that Jamie. I'll keep it in mind x