Shared Ownership

griffi60

Hi all,

I know there is a few posts about this topic but to be honest I want to hear from people who have actually been involved in one of these schemes rather than from someone just calling it a 'scam' or a 'con'.

I moved to London about 6 months ago with my girlfriend and we currently rent a one bedroom flat for £1050/month. This is obviously a lot of money but it is a nice, modern and secure flat in a good area.

We are likely to live in London for the next 5 years or so for work reasons and would obviously love to buy a place but we simply don't have the money for a full deposit. Shared Ownership would be within our reach and I understand that compared to buying it is not as good but to us it seems like a very good alternative to renting. From what we have seen so far they offer nice modern apartments, often for less money each month than what we currently pay and hopefully provide some equity when sold on rather than simply giving money to a private landlord.

If you have experiences in this (positive or negative) then please get in touch.

Keith

geoffky

Its a con and everyone knows its a con but in this must have it now society it fills a gap...
years later down the line the full consequences will reveal themselves painfully..

zzzLazyDaisy

My cousin has shared ownership. It was the only way she could get on the housing ladder. The pluses are that she did not have to find such a big deposit, she does not have the threat of having to move out of her home at two months notice, and the total monthly cost including mortgage, rent and maintenance charges is less than she was paying for private rental.

The down side - who knows, maybe the house will be difficult to sell, maybe she will not get her full deposit back, maybe it was over-priced.

But her, and her two kids, have had somewhere to live with security and a lower monthly cost than renting. She can't move to a cheaper area until they have finished school, so yes, for her, it has been a good thing.

cloudN16

geoffky wrote: »

Its a con and everyone knows its a con but in this must have it now society it fills a gap...
years later down the line the full consequences will reveal themselves painfully..

Hi there,
could you please expand on that. It's obvious that not everybody 'knows' it's a con, no? Would you suggest renting is better when buying on the open market is not affordable?

Thanks

griffi60

Thanks LazyDaisy, all the good points you mention would apply for us as well and so it is sounding quite appealing.

Geoffky, I have no idea why you decided to post, I clearly stated that I wanted to hear from people with actual experience rather than people just throwing in their 2 cents. It's nothing to do with a 'must have it now society', it's the simple fact that I would rather have my money working for me and as cloud suggests surely it is better than renting when buying outright is simply not an option?

Since my first post I have spoken to a colleague who advised me that this has been around for years and that a few of her friends bought into shared ownership schemes quite some time ago in London and came out of it very well. The more research I do into the subject the less it seems like a con and in fact a very good idea for people in our position.

brit1234

griffi60 wrote: »

Thanks LazyDaisy, all the good points you mention would apply for us as well and so it is sounding quite appealing.

Geoffky, I have no idea why you decided to post, I clearly stated that I wanted to hear from people with actual experience rather than people just throwing in their 2 cents. It's nothing to do with a 'must have it now society', it's the simple fact that I would rather have my money working for me and as cloud suggests surely it is better than renting when buying outright is simply not an option?

Since my first post I have spoken to a colleague who advised me that this has been around for years and that a few of her friends bought into shared ownership schemes quite some time ago in London and came out of it very well. The more research I do into the subject the less it seems like a con and in fact a very good idea for people in our position.

Being a keyworker in London with lots of friends having problems with the scheme and myself doing the maths I have lots of very bad experiences. I wouldn't touch it with a barge pole and prefer to have my eyes burnt out. But hey this is money saving expert and if you for some strange reason want to promote a scheme which loses people money and leads to hard ship then go ahead. Do you work for some vested interest housing association or builder perhaps?

However I stand by my view that shared ownership is a scam. If you don't believe me do the maths and look at the bad issues it brings up.

Check the main shared ownership/equity scheme thread for the reasons and real member bad experiences.

https://forums.moneysavingexpert.com/discussion/3177256

griffi60 please don't try and make it sound like roses by blocking peoples experiences of the many bad issues. Lets keep it balanced, its only fair for the users.

brit1234

cloudN16 wrote: »

Hi there,
could you please expand on that. It's obvious that not everybody 'knows' it's a con, no? Would you suggest renting is better when buying on the open market is not affordable?

Thanks

It's explained below on the main thread:

https://forums.moneysavingexpert.com/discussion/3177256

griffi60

Brit, I have no vested interest in shared ownership, if you read my post at the start of this thread you will see that I have genuine reasons for looking into the idea and I am simply trying to find balanced views on each side.

What really annoys me is people like yourself who just keep saying it is a scam and still don't actually explain why!! I understand that I could end up in negative equity etc., but currently I am spending almost 13k a year on rent and to be honest I don't see me losing that much on shared equity

I also find it very amusing that you say "Lets keep it balanced, its only fair for the users" when you are doing nothing of the sort and instead just projecting your own personal opinion backed up with no factual evidence whatsoever.

abankerbutnotafatcat

Through my work I have worked with lots of Housing Associations and I know that from their point of view (as non-profit making organisations) shared ownership is done in order to assist people get on the housing ladder who would not otherwise be able to do so. Some Housing Associations do have profit-making developments to subsidise their social housing activities but shared ownership is in the latter category and the accounts/annual reports of HAs are usually freely available on their websites so that you can confirm this.

However, what I have read on this forum is that the developers i.e. the building companies may be over-inflating purchase prices on shared ownership and if so they are equally fleecing the HA (so in effect the tax payer as these are government funded organisations) as well as the individual part-owner albeit it won't hurt the HA as much as the indvidual.

The answer to this would appear straightforward - do your research and ensure that you do not over pay. Also, of course, read all the small print as far as what your rights and obligations are: maintenance, staircasing (buying additional chunks of ownership) and selling (especially this given your stated 5 year time frame) and ensure that you are happy with the entity that will be both your landlord and co-owner. HTH

betmunch

Its not a con or a scam, all the information about it is available up front and theres nothing hidden from the buyer.

However, its not right for everyone and the ones that its not right for are very vocal about it.

In simple terms and assuming you wish to buy a place (which you said you do) Its not as good as buying outright, but its better than renting.

I have helped several clients with Shared Ownership and they are allo happy with it, also, I have identified a few people that it is not right for and talked them out of it

Richard_Webster

One of the reasons why it is called a con etc is that a high proportion of shared ownership properties are new and HAs have acquired them from developers by perhaps paying over the odds so they pass on the higher "values". As the typical buyer is only paying 50% he doesn't initially notice that it is 50% of an over-valuation.

This issue can largely be avoided by buying second hand SO property which HAs generally have on their books for resale. By then the 100% values are more realistic and the person selling is taking a hit, often having paid too much to start with - but if you buy second hand you much more likely to get reasonable value.