Shared Ownership advantages and disadvantages please

Wickedkitten

gazfocus wrote: »

And have either of you bought shared ownership?? probably not.

I don't need to stick my hand in a fire to know its going to burn. However I have sat next to the fire long enough to see others come along and get burned so if I can tell people who badly they might get burned by sticking their hand into it, then so be it

MoonJelly

I for one would like to hear from somone with experience. We are almost debt free but because of our age no bank will give us a 25 year mortgage and we can't afford to pay a large mortage in 10 years either!:(

We are looking at a 25% SO as the only way to have a place which we can afford in a good location and where at least some of our rent money may find its way back to our pocket. Am I right to think this?

gazfocus

MoonJelly wrote: »

I for one would like to hear from somone with experience. We are almost debt free but because of our age no bank will give us a 25 year mortgage and we can't afford to pay a large mortage in 10 years either!:(

We are looking at a 25% SO as the only way to have a place which we can afford in a good location and where at least some of our rent money may find its way back to our pocket. Am I right to think this?

What do you mean by 'where at least some of our rent money may find its way back to our pocket'?

The 'rent' you will pay to the housing association will always be for the housing associations benefit. You can purchase more of a shared ownership property further down the line but you won't be eligible for any discount due to length of time in the property, etc.

MoonJelly

gazfocus wrote: »

What do you mean by 'where at least some of our rent money may find its way back to our pocket'?

The 'rent' you will pay to the housing association will always be for the housing associations benefit. You can purchase more of a shared ownership property further down the line but you won't be eligible for any discount due to length of time in the property, etc.

I meant to say that if we decide to sell later on we can get back the 25% we paid. I understand that the rent we pay over the remaining 75% of the property is for the association.

leveller2911

MoonJelly wrote: »

I meant to say that if we decide to sell later on we can get back the 25% we paid. I understand that the rent we pay over the remaining 75% of the property is for the association.

In theory you could make a profit on your 25% but your could also end up making a loss if you sold for less than you bought it for.

leveller2911

mynameistallulah wrote: »

Another one who is forming an opinion on hearsay ...

My opinion is based on anecdotal evidence from 4 friends who have all bought via shared ownership.Its not Joe Bloggs told me down the pub and all 4 have had real problems with SO so why should they all lie about their circumstances?.

I would also repeat what Wickedkitten posted previously "I don't need to put my hand in the fire to know I would get burned".

I really couldn't have put it better myself.

Its up to each individual to research but just to add HPI has risen something like 100% in the last decade whereas earnings only rose by about 40% so theres the problem,people can't afford to buy unless A earnings rise by a substantial amount or B house prices drop.

HPI needs to be curbed so that we don't carry on with this boom n bust in the housing market and people should be able to buy a home and not buy an investment.

wolfplayer

gazfocus wrote: »

but our lease does state that should we come to sell the property, we can choose to market the house as an outright sale rather than shared ownership!

Shared ownership type homes are shared-schemes, buying a share, because most people interested in getting a home... can't afford to full asking price.

Really... do you think this home would be attractive to any buyer if they are required to pay full price?

For buyers who can afford to go for the outright purchase, via mortgage (not a share), my bet would be there is much by way of other homes in the area, far superior, than a shared-ownership home on an outright 100% sale.

Also in many instances you're not a home-owner in shared-ownership at all. You don't have any share, except in the lease. Just a glorified tenant, but with lots of the problems that come with actual ownership.

Apparently, nearly 1 in 100 households in England has a shared ownership lease. It therefore follows that 1 in 100 households are in for a very nasty shock, when they discover that they do not necessarily own a share of the property!

http://www.practicalconveyancing.co.uk/content/view/10570/1124/

leveller2911

gazfocus wrote: »

I'm also well aware of the prices falling. We're in fact paying £8k less than what our sellers paid for the house but our lease does state that should we come to sell the property, we can choose to market the house as an outright sale rather than shared ownership!


Are you sure about that Gaz?. How can you market the house as a 100% sale when it clearly wouldn't be.

What benefit is there in marketing it as 100% sale other than deceiving the prospective buyer into thinking they are buying a whole house. If indeed the clause does exist then it smacks of the HA knowing shared ownership would not appeal to the vast majority of prospective buyers and as such trying to disguise the fact.

Bluemeanie_2

I am totally speaking from my personal perspective here. After finishing university in June 2006, aged 23 and moving back to Leicestershire with the rents, I was desperate for my own place. I had left when I was 18 (to work in Ireland, before going to Uni at aged 20) so wanted my own space back.

I worked loads of overtime and got a deposit together. Began looking for a house in June 2007 (if I knew what I know now would have stayed at home for another 2 years, got a fat deposit and then bought a house in a mint area! Oh well, if we all had a crystal ball eh?).

When I looked at shared ownership, the reason I didn't fancy it was, the cost of paying 50% mortgage and 50% rent actually added up more than just the mortgage payment on its own. That was the sole reason I didn't go for it. It was like receiving the two worst ends of renting and buying. All the negatives. That would be my opinion on the main disadvantage. You are 100% paying to run and maintain a property that you only 50% own. Your "landlord" doesn't pay for half your new roof, or half your decorating costs, new carpets etc. despite you paying rent to them.

I can't personally see any advantage to shared ownership, but am open to others opinions of course.

wolfplayer

mynameistallulah wrote: »

As far as I am aware, he has never owned a shared ownership property, so have to agree with the others - best to ignore him.

Brit has never invaded Russia either, but he can probably point you to solid reasons for why it's not a good idea to.