Shared Ownership, is it a good idea?

mikemessa

Hi there, I am currently looking to purchase my first property but have limited funds. I was wondering if shared ownership is a good idea or is it not worth pursuing. If I got a normal mortgage the 10% deposit would leave me with no money. Is there anything our there where a 5% deposit is satisfactory?

Thanks

angieanguk

I bought a 50% share in a shared ownership house circa 2008 and managed to get a 100% mortgage at the time - the full price of the property being £93k. I then got married and we put it up for sale to move to a larger house in 2010 and it sold for the asking price of £110k with us having half of this. We were very lucky and was able to take advantage of the house prices rising. People tried to put me off buying on a shared ownership scheme at the time however it certainly worked for me, we had a brand new home in a very good area and enabled me to get a foot on the property ladder as a single parent at the time. I obtained my mortgage through a broker with the Leeds Building Society - I don't know if they still offer these types of mortgage but might be worth a try. Good luck.

brit1234

Your better off saving a bigger deposit and buying normally. Read the many shared ownership threads on this forum to understand the issues/problems with the scheme.

ACG

Shared ownership can be a really good scheme.

From a personal point of view, its not something i would do - i have no realy reasons for that i just think if im buying something i want it all to be mine. But im in a position where i could go back to my parents if i wish and save up - not everyone can do that.

However owning your own place and (hopefully) building up a percentage of any equity is better than building up none. If nothing else you will eventually own part of that property in full - renting will never result in your owning a percentage and its all dead money effectively.

rainbow_carnage

brit1234 wrote: »

Your better off saving a bigger deposit and buying normally. Read the many shared ownership threads on this forum to understand the issues/problems with the scheme.

Easier said than done.

I've read dozens of threads about shared ownership, with the same few posters trying to dissuade anyone from taking this option. You may be right, but what's the alternative?

We live in London. The average price of a 2-bed flat in our area is £300k. To get a £300k mortgage, we'd each have to earn around £50k. I don't see that happening in the next 8-10 years. By that point the same flat will cost £450k.

The deposit isn't really the issue. We could save up some money and borrow the rest from my parents. But no one would give us a mortgage, though the monthly repayments would be the same as we'd have to pay in rent on a similar property.

How on earth are people supposed to save up for a bigger deposit while throwing away £1500 a month in rent? And even if they do, who would lend a first time buyer that kind of money?

I'm not convinced that shared ownership is the answer, but I've yet to see anyone suggest a viable alternative. It sounds like the people giving all the advice were lucky enough to have bought their first homes when you could still get one for under £100k. What are the rest of us supposed to do?