Shared Ownership

betmunch

Richard_Webster wrote: »

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.

The same applies to buying New Build without shared ownership though.

Everyone knows there is a New Build premium, some people will pay it some wont.

One could argue that with shared ownership the instant drop in value when you move in is shared by the Housing Association and therefore is better for the buyer.

and_another_thing...

Hi Keith

I only have positive experiences. I bought a flat a couple of years ago. My scheme enabled me to buy any property on the open market and I bought a Victorian 2 bed conversion in a good area of London. Thus I avoided an over inflated price buying a 'second hand' property. As I bought in a good area I have not and I imagine will not experience negative equity either. Property proces where I live have continued to rise.

Make sure you don't buy a completely new property. Also consider converted pubs, schools etc as these will be more attractive to buyers when you come to sell - and will also have more character. Go for a small development not a place on a huge sprawling modern estate. Check out the First Steps website to see what's on offer. It's worthwhile waiting until something you really like comes available.

Don't buy on one of those developments that are supposedly 'in London' but are in fact 30 miles away (They're often advertised at the back of the Evening Standard on a Wednesday) Go for something in zones 1-3 instead and it's got to be close to transport links.
Ensure you take out a mortage on a decent percentage of the flat ie over 55% and carefuuly read through all details regarding service charges to make sure you can afford them.

If you are sensible and savvy SO is a good option especially in London where rents are on the rise anyway.

betmunch

and_another_thing... wrote: »

Hi Keith

I only have positive experiences. I bought a flat a couple of years ago. My scheme enabled me to buy any property on the open market and I bought a Victorian 2 bed conversion in a good area of London. Thus I avoided an over inflated price buying a 'second hand' property. As I bought in a good area I have not and I imagine will not experience negative equity either. Property proces where I live have continued to rise.

Make sure you don't buy a completely new property. Also consider converted pubs, schools etc as these will be more attractive to buyers when you come to sell - and will also have more character. Go for a small development not a place on a huge sprawling modern estate. Check out the First Steps website to see what's on offer. It's worthwhile waiting until something you really like comes available.

Don't buy on one of those developments that are supposedly 'in London' but are in fact 30 miles away (They're often advertised at the back of the Evening Standard on a Wednesday) Go for something in zones 1-3 instead and it's got to be close to transport links.
Ensure you take out a mortage on a decent percentage of the flat ie over 55% and carefuuly read through all details regarding service charges to make sure you can afford them.

If you are sensible and savvy SO is a good option especially in London where rents are on the rise anyway.

Sounds like the Open Market Homebuy Scheme, am I right?

This was a cracking scheme that really got houses selling as it would often start a chain going.

Guess what, the government restricted it to new builds! Now it only serves to keep new build prices up and no longer starts chains of so only helps one consumer, that said, if you know what you are getting and are happy with paying extra for new builds then it has its place

and_another_thing...

betmunch wrote: »

Sounds like the Open Market Homebuy Scheme, am I right?

This was a cracking scheme that really got houses selling as it would often start a chain going.

Guess what, the government restricted it to new builds! Now it only serves to keep new build prices up and no longer starts chains of so only helps one consumer, that said, if you know what you are getting and are happy with paying extra for new builds then it has its place

Yep - Open Market Homebuy it was.
However a colleague of mine bought a SO new build at around the same time as me. They bought a lovely flat in a converted pub. 8 flats in total all shared ownership. Yes, it was new build and therefore initially overpriced, they bought in an area (Crystal Palace I think) that has since benefitted from new transport links into central London and they will make a profit if they sell now.
So as long as you buy in a good location you should be OK.

betmunch

and_another_thing... wrote: »

Yep - Open Market Homebuy it was.
However a colleague of mine bought a SO new build at around the same time as me. They bought a lovely flat in a converted pub. 8 flats in total all shared ownership. Yes, it was new build and therefore initially overpriced, they bought in an area (Crystal Palace I think) that has since benefitted from new transport links into central London and they will make a profit if they sell now.
So as long as you buy in a good location you should be OK.

Absolutely spot on and applies to any purchase not just Shared Ownership

griffi60

Thanks for all your advice, very much appreciated. To be honest we had been looking at some new build places but I'll take your points on board and try to delve a bit deeper for 'second hand' properties or something with a bit more character would be great.

We are a bit restricted by area as we want to be close to my girlfriend's work and I need very good transport links as I travel a lot for work.

Betmunch not sure if you can answer this or not, but are there any schemes currently that you would (or wouldn't) recommend? Also is FirstSteps the best place to find info or would I be better actually going to speak to some HAs etc.?

betmunch

I dont know enough about you to say a scheme is right or wrong for you, I personally put a lot of stock in the house you want, if the right house comes with a scheme attached then its likely that scheme is right for you as the over-riding objected is to secure said house.

All these scheme have downsides, its up to you to decide if the down side is outweighed by the upside, and then make a plan to elimiate the downside altogether, ie to complete 100% ownership

Find the house you want then, if it comes with a scheme, ask me about it and I'll tell you what you need to look out for

londonbabe73

Hey,

Don't listen to the scaremongers !! I've got a shared ownership after a relationship breakdown I didn't have enough to afford a whole property BUT there are some golden rules NEVER EVER buy a new build go for a resale property and the main rules is never buy where there are social housing tenants in the same block ( called 106 agreements half a block can be rented the other half shared ownership ) these are a disaster because IF and I'm not saying every social housing tenant is a nightmare but if you get a nightmare family who trashes the block it effects the price of your property. Go for a maisonette with no shared areas ie no hallways and your own front door and you should be ok . I live in tedington for £760 PCM there is no way you can rent a flat for less than £1200 PCM that's made up of £300 rent and service charge and £460 mortgage ( was originally 100k now gone down a bit after 5 years ) and I own 50% .

As I said make sure you do your research and don't be tempted by the shiny new builds and they all seem to lose money and the service charges are crazy.

Check out tower homes / catalyst / Thames valley they all have home ownership units and ask for their resale list.

Good luck !!!

shredder1uk

Some good advice here. I just posted a thread about so didn't see this one. The property I am looking at is 9 years old semi so would have taken the initial hit. As I can't afford a big deposit this seems like a good oprion to me.