Shared Ownership Advice

dpr666

richardw wrote: »

So high service charges and high council tax give high monthly costs on some which is a big no no.

I have just spoken to the estate agents and they have given me a estimated breakdown of the monthly costs:

£310pcm rent/mortgage/ground rent/concierge & maintenance

I have calculated the following:

£70pcm Council tax band C
£100pcm Utilities
£40 Internet/TV

GRAND TOTAL: £520pcm

As I said before if I was renting a similar flat I would be looking around £700pcm just for rent, so it is still much cheaper.

richardw

dpr666 wrote: »

£310pcm rent/mortgage/ground rent/concierge & maintenance

I'd want a full analysis of £310 so you can see what isn't included.

bubbles2012_2

Hi guys, sorry to butt in and also sound stupid! But could anyone help a newbie out and explain how I post a new thread.... i cant seem to find the button anywhere.... yes, i am blonde!!

Thanks in advance

dpr666

richardw wrote: »

I'd want a full analysis of £310 so you can see what isn't included.

I was planning on getting more information when I view the flat tomorrow. it does seem a little too good to be true. I had anticipated around £240pcm for mortgage and £130pcm for rent. That's without service charges! So I am a little dubious of £310 myself.

heathcote123

dpr666 wrote: »

Hi,

I am a 25 year old single first time buyer, and whilst I am not ready financially to get a full mortgage, I have been looking into the option of shared ownership. I have been looking around at flats and have finally found a nice new build 1 bed that is just what I've been looking for. It is priced at £55500 for 50% equity. I know that my responsibilities are to get a mortgage for my 50% and then pay a small amount of rent on the 50% I don't own (normally 3%). I have £10k for a deposit and using that the average mortgage I can find for the remaining £45500 is around £240pcm. And I estimated the total rent on the 50% I don't own to be £135pcm (@3%). A total of £375pcm.

When speaking to the estate agents they said that the total monthly payment from me would be £310pcm. He said that £125 of that is rent and the rest is mortgage repayments with a 5% deposit.

My main question is does that seem right? To me it seems too good to be true. Does it mean that they will arrange a mortgage on my behalf?

Many thanks in advance!

Depends on what mortgage deal you get - if you can get 3% you'll have a repayment of 215 a month. The HA will be able to give you details on rent. I have an S/O and pay around £120 pcm on about 85k (half the value of the house), so if you are paying at the same ratio, maybe 80-90 pcm on rent - which would be inline with the EA suggestions.

Souns like a good deal, but check very carefully ground rent & maintenance fee's, these can add quite a bit on (not just in S/O but in any flats)

Sounds like a cheap way to get on the ladder & get your own pad, but you really do have to do the sums yourself, don't take the word of an estate agent, and speak to your bank or mortgage broker re a mortgage - you may be limited as to your options with S/O.

I was in a similar position a few years ago, and it was a fantastic move for me.

dpr666

heathcote123 wrote: »

Souns like a good deal, but check very carefully ground rent & maintenance fee's, these can add quite a bit on (not just in S/O but in any flats)

Thanks Heathcote123! I really appreciate your feedback. That has answered my question brilliantly. It's good to know that the deal isn't necessarily too good to be true.

From what everyone has said I think the main thing I need to find out about is the ground rent & maintenance charges. I have just contacted the development company and the HA responsible for the building so hopefully they will be able to give me some information before I meet up with the estate agent tomorrow evening.

I'll let you all know how I get on!

19lottie82

If it’s a one bed you are looking at, please thing VERY carefully. Plenty of stories on here of once upon a time singletons buying a place that they soon out grown once they gain a partner and child. Add in the possibility of negative equity and you’re stuck.

https://forums.moneysavingexpert.com/discussion/3730027

dpr666

19lottie82 wrote: »

If it’s a one bed you are looking at, please thing VERY carefully. Plenty of stories on here of once upon a time singletons buying a place that they soon out grown once they gain a partner and child. Add in the possibility of negative equity and you’re stuck.

Thanks, that is actually the one thing I haven't thought about so far. With being single for the last 3 years I had just resigned to the fact that I would live the rest of my life like an eligible bachelor! :rotfl:

However I would consider my situation is different to the sample you gave due to the fact that I am planning on gaining 100% equity within 5 years. I am definitely not planning on having children within this time frame!!!

vivster

Just make sure you go into it with your eyes open and ask lots and lots of questions. Check out the selling restrictions that will apply if you want to buy outright, and be aware that you'll still have to pay the service charge if you do buy outright.

My service charge covered (among other things) buildings insurance, lift servicing and maintenance, cleaning and grounds maintenance and communal utilities. About 30% was paid into a sinking fund for major works. It was audited every year, and so could be revised down as well as up. I was paying about £20 a month less in 2011 than I was in 2005.

You should be sent a copy of the audited accounts and you should be able to get back any overpayment. The HA sent me a £600 cheque one year for service charge credit.

HAs have to do everything by the book, which has its advantages. The flipside is they can be slow and bureaucratic.

19lottie82

dpr666 wrote: »

I am definitely not planning on having children within this time frame!!!

With all due respect, a lot of people who have kids weren't planning them 5 years ago!

Your views on life can change A LOT between the ages of 25 and 30 (trust me). 1 bed flats can be hard to sell, should you need to, and as I said if you are in negative equity, even more so!

This forum is rammed with threads from people who bought 1 beds when they were single and now have families living in them.

I personally know at least 2 people in this situation.

I know you feel at this point that it won't happen to you as you are happy as a batchelor, but it's definitely a point worth thinking about, seriously.