Shared Ownership

bloc75

Ok, I am coming up to 1 year now since my IVA was completed. I don't have any adverse credit and have just spent the past 12 months paying off a 2k overdraft.

Me and the wife combined earn around 3k per month after taxes, but we don't have any deposit.

Now I know it's the absolute worse time in history to be buying a house, but I'm 36, she's 32 and time is ticking on.

So I have heard about these shared ownership schemes where you can get 50% on mortgage and 50% on rent, and you can buy up more shares in the property through your time with that property.

Has anyone experienced something like this who could possibly give some advice?

The_J

OK.

1) You need a deposit.
2) Time is ticking on but life begins at 40
3) For Shared Ownership lenders you'll probably need a couple more years out of the IVA.
4) It's not the worst time to be buying in history.
5) Shared Ownership is no better than buying a normal property. In fact, a bad shared ownership property can end up costing you more. There are some good ones out there but given your financial record I'm going to be a little harsh and say perhaps you shouldn't take a risk on it?

bloc75

Hmm, can I retort?

1. I know I need a deposit, but I was thinking 50% mortgage may mean less deposit, but perhaps that is not right.

I know that I need at least £15,000 deposit for a mortgage of £150,000. That would take me around 5 years to save up. So unless I get inheritance or lottery win, not going to happen.

2. ok, so I have 4 years to save up?

3. Ok thanks.

4. Well perhaps I was a little extreme, but it's not a great time to be buying.

5. Good point.

Thanks

The_J

Good questions, maybe I was wrong about you.

Exactly right, with shared ownership your 10% deposit on full value drops to 5% if you go 50:50. You then pay rent on the other half though and I find that this can often be expensive, and increase after you have moved in which isn't fun.

With 3k net income you should certainly be able to save harder than £250 a month. You need to live like monks and you could see up to £1500 a month go into saving.

It is actually a good time to be buying if you find the right property. However things aren't going to change much in the next few years so you'll be ok.

bloc75

Well having this IVA stigma is a bit of a !!!!! too.

It's annoying because for the past 7 years we have been renting properties at £600 per month, so clearly we have affordability.

anotherginger

I too don't see how it would take you five years to save 15000! This is a simplified approach but you say your current rent is 600, so from your 3k your have 2400 to play with each month. Even taking bills, food, petrol etc into account you could easily save your 15000 within a year.

brit1234

Bloc75 just knuckle down and save a deposit and buy normally avoiding shared ownership if you can. I'm a key worker and many of them have nightmares with their shared ownership properties. There are loads of extra costs, the service and rent go up faster than your wages, many restrictions and big difficulties selling especially if you stair case.

Get saving, here are the MSE recommended accounts at the moment.

Normal savings
http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

ISAs
http://www.moneysavingexpert.com/savings/best-cash-isa

bloc75

Well one thing I plan to do is get rid of my car.

I spend around £3k running it. Going to get a bike for £300 and cycle to work and it will save me around £2k.

bloc75

I also reckon I could save around £300-500 a month. I was paying £250 a month to my IVA for 5 years, and then £200 a month for my OD for a year.

So I can afford £250 + the savings I make on not having a car.

It's certainly possible.

[Deleted User]

https://forums.moneysavingexpert.com/discussion/789675

This thread is a saving for a deposit thread - it can be quite motivational