Shared Ownership - Opinions please.....!

TheSaint_UK

Apologies but what is the difference between the two. I totally understand the premise of SO, but I am unsure what SE is.

I will of course research this, but if you can sum it up in one paragraph I would appreciate it.

Thanks for all the advice so far (yes, all of you) can I also ask what people think is better in a two horse race: Renting or Shared Ownership?

Thanks!

geoffky

and_another_thing... wrote: »

Note that these links relates to shared ownership, not shared equity. Very different schemes. OP as I said, investigate local shared equity schemes.

Here is what the op asked

Shared Ownership - Opinions please.....!

and read what the headline of my first link is
i think you are confused...

Shared equity does not lead to full ownership

geoffky

TheSaint_UK wrote: »

Apologies but what is the difference between the two. I totally understand the premise of SO, but I am unsure what SE is.

I will of course research this, but if you can sum it up in one paragraph I would appreciate it.

Thanks for all the advice so far (yes, all of you) can I also ask what people think is better in a two horse race: Renting or Shared Ownership?

Thanks!

Depends whether the race has been fixed or the horse has been nobbled
:eek::eek::eek:



here is some info i have found


The differences between shared equity and shared ownership are complex, but generally, with shared equity you purchase ALL of a property but with an equity share loan making up the difference between the mortgage and purchase price (i.e. to a large extent, this shared equity loan is your deposit). In contrast, shared ownership schemes are usually undertaken whereby you only own a specific share as a lease on a shared ownership property (normally owned by a housing association), and you can only achieve 100% ownership by 'staircasing' up from shares of 25%+ to full ownership.
Strengths and weaknesses of Shared Equity v Shared ownership

In Shared Equity's favour:

• Your own personal deposit contribution in a shared equity property purchase can be small (often as little as 5%, compared to a standard minimum of 10% on shared ownership schemes)
• Shared equity is normally on houses rather than flats, and you are therefore less likely to have to pay service charges
• Most importantly, rates tend to be better on shared equity mortgages rather than shared ownership home loans because the lenders in a shared equity case will treat the 'loan to value' as being based on your share divided by the whole market price – so you could find yourself putting down as little as 5% of your own money as deposit but obtaining a mortgage rate put aside for a 30% deposit!

Against shared equity:

• As open market shared equity schemes are currently closed to new funding, you are presently restricted to new build shared equity homes. With shared ownership, the properties are USUALLY new builds available under the new build homebuy scheme, however, it is also possible to buy shared ownership properties on a second hand basis through a resale scheme when an existing owner sells their share – so potentially, shared ownership offers more choice of properties.
• The initial share is normally much larger in shared equity (typically 70%) compared to 25% minimum with shared ownership. Thus, the mortgage is likely to be much larger on a shared equity property. Moreover, although shared equity mortgage rates can be better and the deposit lower, 5% deposit on a 70% share may well be more than a 10% or even 15% deposit on a 25% share.
• Most importantly, with shared equity, as you are buying the whole property you may have to pay stamp duty tax on the whole property (if it is over the threshold) whereas you are unlikely to have to pay any stamp duty buying a shared ownership home.

and_another_thing...

geoffky wrote: »

Here is what the op asked

Shared Ownership - Opinions please.....!

and read what the headline of my first link is
i think you are confused...

Shared equity does not lead to full ownership

Copied from that article:
While some shared owners are able to move on due to improvements in their finances, many are unable to afford the greater cost of a full ownership mortgage, the study found.

Surely the fact that SE does not lead to full ownership is due to the individual's financial circumstances and not the schemes themselves.
A close friend now owns 100% of her flat after staircasing two years ago. She has made a decent profit and is moving in with her partner to a larger property. It worked well for her and will also work well for many.

Anyway, OP, some shared equity schemes allow you to purchase homes on the open market which limits the risk of HAs and developers artificially inflated prices which is what happens with shared ownership schemes. You may also be able to sell on the open market. If you can buy ANY property then service charges will only have to be paid if you purchase a leasehold property. Buy a freehold/SOF flat or a house then you will only need to pay the HA a loan fee. Mine is currently £120 per month.

and_another_thing...

Geoffky has provided you with a comprehensive list of pros and cons.
I would definately check if there are any shared equity schemes in your area that allow you to buy any property on the open market as these seems to be the most beneficial schemes. Personally I wouldn't buy a new build property - part of a HA's development. More cons than pros.

Person_one

OP, is there any reason you can't stay in your current house for a bit? Second babies don't take up that much room, it seems your easiest option.

geoffky

Look apart from London where are the gains going to come from? and London will fall in the end..Hoping for gains to get you on the housing ladder is a distant memory...we are turning Japanese..

TheSaint_UK

Person_one,

I totally understand what you are saying, but we have such a small house at the moment it is beginning to affect our sanity. There is no secure garden for our son to play in as our neighbours have a right of access through our front garden (quarterback house). This effectively means that we have no outdoor privacy whatsoever, as anyone can walk through our tiny garden at any moment.

The new neighbours who moved in behind us are constantly playing loud music and shouting until all hours, and we are just getting to the end of our tether.

Whilst I do concede that staying put is probably the easiest and possibly even more sensible option, I just can't see it happening due to how we feel about the place.

brit1234

geoffky wrote: »

Brit i do wonder if it is best that we sometimes just let the people find out the hard way...The sellers of these scams rely on people who are financially illiterate.

Sometimes I agree. I do get fed up with people over paying to get one of these scam properties either shared ownership/equity and bragging about it only 2 years down the line be in trouble with the property.

I have seen it with many of my key worker friends, I have seen it with dozens of horror stories on MSE, I have done the figures, they don't add up.

I think and another thing has another scheme like I was offered when I joined the police. They give you a certain amount of cash to help you buy a property up to £160K and when you come to sell you have to pay back the loan and the percentage of the properties increase which that loan represented. They kind of disappeared in about 2005-2006 when the prises went over the £160K.


Anyway we will always have a significant gullible/financially illiterate portion of the population who thinks that shared ownership/equity is a good deal. I guess if they won't listern they will just have to find out the hard way it is a scam.

poppy10_2

TheSaint_UK wrote: »

The new neighbours who moved in behind us are constantly playing loud music and shouting until all hours, and we are just getting to the end of our tether.

If you move into a shared ownership property, you are probably more likely to end up with antisocial tenants, as the rest of the properties fail to sell at their inflated prices, they will be filled with HA tenants