Shared Ownership opinions from people who have done it!

Moo7498

Hi guys,

I have seen a property I love and it is a resale under the shared ownership scheme with Russett Homes (circle anglia)
There is 25% up for sale at £42,500 and after much research for a year now I have realised this is the only way I can afford to buy with the goal of stair casing to 100% eventually.
I earn £21,000 a year and have £10,000 saved. I have been told I can only borrow 72,000 at most (therefore could buy a shed if buying a full property!)

I am not a person to want to have children and want to move after a couple of years etc so am thinking this is a good thing for me...

Can anyone shed some light on their experiences and if anyone has heard of any stories with Russett Homes too?

Thanks for your help I appreciate it

PasturesNew

If you want to move, I don't see the point of doing it - they can be difficult to shift. The cost of buying/selling in 2 years might make you wish you'd not bought it.

They are overpriced - and staircasing might not be the best solution. I'd see it more as ensuring I could live there as long as I wanted to and keep it to the 25% - and for that reason I'd see it as a long-term solution only.

kizkiz

There's lots of thread on here with horror stories.
have a read of some and try to ignore the less impartial posters. lol
The main thing i get from reading the forum is the potential costs and rent increases from flats

Moo7498

Thanks for your help guys, I absolutely love it though and simply can't get a mortgage any other way. Will go view it again and see how I feel.

brit1234

Moo7498 wrote: »

There is 25% up for sale at £42,500 and after much research for a year now I have realised this is the only way I can afford to buy with the goal of stair casing to 100% eventually.

If you are considering shared ownership which I consider a bad idea please look into the stair casing issue.

Now I wouldn't recommend shared ownership to anyone but if you are going to do it, it is better to get as small share as possible and pay off that share off completely before looking to stair case. This will protect far better from price falls and give you more equity for future properties. It will also make it easier for you to sell if for example if you increase the size of your family and need somewhere bigger or need to move for work (very common issue).

If you are ok at maths do the sums paying your 25% share off first against stair-casing. If maths isn't your strong point ask a friend who is better at maths. By stair casing you are putting more of the risk on yourself, by not the housing association takes a 75% share of the risks instead of you.

Remember with shared ownership it is better to rely on your head than your heart. Good luck

J_i_m

Like the OP, I see myself a bit of a singleton who has no intentions of ever having kids (though partner would be nice). On the face of it shared ownerships seems a good idea to at least get myself a house that I sort of own.

However.. If I can, I want to go 100% ownership route mainly to avoid the possible pitfalls of getting stuck there of a few years down the line if my circumstancs change and I really need to move etc.

I have a similar income to the OP, and his mortgage seems to be about right from the use of "mortgage calculators" I've had. But my advice would be that if you can, sit tight and increase your deposit. This would help you obtain a better rate on a mortgage at the very least, and increase your budget a bit.

I'm looking to save £20'000 minimum for my deposit.. Maybe more.

princeofpounds

I earn £21,000 a year and have £10,000 saved. I have been told I can only borrow 72,000 at most (therefore could buy a shed if buying a full property!)

Do you not think that your inability to buy a property normally is some kind of message to be heeded?

Shared ownership is not a charitable activity that somehow provides you with a better price.

At the numbers you are talking about, you are thinking about buy a house for TEN TIMES your income. TEN TIMES! That is only affordable because interest rates are super-low, and even then you can only afford a small portion.

Depending on how the shared ownership works (and they vary a lot) you could even be stuck in a situation where the property is never affordable. Imagine rates go up to 7% (sounds high, but actually is close to long-term average). But the staircasing happens at the higeher of initial purchase price or 'market' valuation. You would never be able to afford to increase your share.

But you would never be able to sell it either because you would be in negative equity on the share you do own, and that option would not be available to you until you paid down the entirety of your mortgage. Which would take years.

Don't forget either that the beauty (from the developer's perspective) of shared ownership is that you pay all the maintenance AND they get to charge you a service charge on the block, on top of rent and mortgage. These costs should not be underestimated. If the boiler blows up do you have £2k spare to fix?

samwich1979

Last year i rented a flat in a shared ownership development and for the past year 6 properties have been up for sale and have not budged.

They range from 25%-50% shares. It is a good area right by a train station, motorway links and shops, so i think that once you have a share in one of these properties you are stuck with them for a VERY long time, no matter how nice the house/flat or area.

I think this should be thought about over everything else.

nesco

I will tell my experience with Plum,housing assoication with shared ownership.
Because I had bad credit score (£230 CCj 6 years ago)I wasnt able to get a mortgage.
I have saved up £30.000
I wanted to buy £30.000 share %25 share
For months I have been persuaded to get a full mortgage. I told them it was not possible.
They made an appointment with mortgage broker and got a letter from mortgage broker that I cant get a full mortgage.
After than I have been offered %25 share( all share properties on a leasehold basis)
I have been told to get a solicitor even though I have a friend who can deal with these kind of thing.
They have told me that it has to be their approved solicitor. (there goes around £1000 for leasehold to be forwarded to me.

I have fully read the lease hold and it states that under no circumstances I can not let out the property.
I backed down, because we dont know what will happen tomorrow. I didnt wanted to be stuck with a property for 125 years lease on the paper and still paying rent for the remaining 75% share.

My advice wait for another year or so and save up more. If possible get a shared ownership on a freehold property(family member or a friend)


Also it took 8 months for papers going around without even starting legal proceedings

poppysarah

If you saved £30k then that's a whole house in some parts of the country.

Moo7498

Thanks so much for your replies, lots to think about!
Brit1234 wouldn't it take forever to pay off a 25% share though before buying more? The rent on the other 75% is £326 and maintanence/service £86.
I understand that it is ten times my income but the point of the scheme is for people who are going to see their income increase over time which mine will be!
This property had had about 4 viewings since it went up about 2 weeks ago and is near a train station that goes straight to central London and also had the Eurostar. Am hoping that helps should my circumstances change (which I doubt as I don't want children!) :-)