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What is "shared ownership" please explain in detail
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BrettMorganxD
Posts: 2,048 Forumite
Just saw a property i liked for 70k and it said shared ownership... rent payable 165 so would i be paying a 70k mortgage plus rent as well?
also r u free to do what u want to the property in shared ownership? if not seems a bit pointless.
also r u free to do what u want to the property in shared ownership? if not seems a bit pointless.
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Comments
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Best to make it an example.
A housing association buys a property for £100k.
It sells 70% to you for £70k and keeps 30%. You put down a deposit and take a mortgage to raise your 70%. You pay rent to the HA for its 30%.
In future, you can purchase more shares in the property by "staircasing" upto 100%.
Service charges can be payable on top of the rent and you are responsible for all repairs and renewals, despite having to ask for permission from the HA for any improvements or alterations you might wish to make. You are often unable to sublet, so no way of letting it if you want to move quickly and can't sell
When you wish to sell, you have to follow the terms laid down by the HA on the valuation, and pay the HA's legal and admin fees. You will also be selling just your 70% and the HA will keep its 30% and will rent it to your buyer.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
kingstreet wrote: »When you wish to sell, you have to follow the terms laid down by the HA on the valuation, and pay the HA's legal and admin fees. You will also be selling just your 70% and the HA will keep its 30% and will rent it to your buyer.
...and consequently finding anyone to buy the thing can be a bit of a mission!0 -
True.
Although you could set it up for staircasing upto 100% at completion, so your buyer can buy the whole property, not just your share.
Doesn't really answer the problem though.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
kingstreet wrote: »True.
Although you could set it up for staircasing upto 100% at completion, so your buyer can buy the whole property, not just your share.
Doesn't really answer the problem though.
what deposit would you need on £35,000? i heard u have to have 25% now which seems a lilttle daunting0 -
I think the norm for shared ownership is 10%.
Coming back to your PM, is this property likely to be worth only £70k? I'm feeling if it's a house in a decent area, the £70k is more likely to be the share you buy, rather than the whole.
Tell us where and what it is and we'll figure it out.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
kingstreet wrote: »True.
Although you could set it up for staircasing upto 100% at completion, so your buyer can buy the whole property, not just your share.
Doesn't really answer the problem though.
Just to add, not all Housing Association shared ownership allow 100% staircasing.Some will only allow a maximum of 80%.0
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