Shared Ownership?

Tuareg

Looking at getting a 25% share in a flat.

Wondering what others think about shared ownership schemes?

Having your own home is GREAT but want to say it kinda hacks me off that owning only 25% I'm still liable for 100% of the bills. All the downsides of both renting AND buying with only 25% of the benefit of having bought!
Thoughts appreciated

lvm

https://forums.moneysavingexpert.com/discussion/3177256

Although I happen to agree with the OP of this thread that Shared Ownership isn't particularly beneficial, I've found Shared Equity excellent. I have a SE property which I purchased in 2006 and would have twice as much negative equity as I do now if I had bought 100% of the property.

From what I've read on this forum on Shared Ownership, it all seems a bit one-sided (and not your side!) although I'm sure it has it's benefits too.

Read all the info here before jumping into anything.

Taadaa

Shared ownership helped us to get on the property ladder in 2003. And when we sold, we got a percentage of the equity that had built up.

We found that the service charge was steep for our flat, the rent was as much as the mortgage and when we had any issues they weren't particularly helpful. I kinda think it's a last resort to be honest.

Kynthia

I wouldn't say it's has all the downsides of renting and buying. For a start, in renting you have little security as a LL could start eviction proceedings after just 6 months so you can end up moving multiple times with all the costs associated with this including credit checks. Also you wouldn't always be allowed to decorate to your taste or have pets.

You will get a bigger property than you could afford to buy without SO and possibly will benefit from property price increases which you don't with renting. However there are also a lot of downsides. Therefore most people are better of buying a property fully but it benefits some.

vivster

Agree with Kynthia.

Generally preferable to buy outright if you can afford it. If you can't, SO can work well.

I had an SO flat for a few years, which I sold in December. I made a bit of money on it, which I used as a deposit to buy a house outright (exchanged yesterday - woo hoo!).

What I liked best was the security of tenure. No one was going to tell me to leave and I could (within reason) do as I pleased: re-decorate, put in a new shower, fit a new kitchen etc. And the costs (mortgage, rent and service charge combined) were so much cheaper than renting in the private market. I never resented the rental portion of my costs, it always felt like 'my' flat. The service charge was reasonable: the lift never broke down, the communal areas were kept very clean, I was credited back any underspend.

The housing association (Peabody, in my case) could be slow to respond to reported problems and there's a certain amount of bureaucracy involved, but that's no doubt the same for lots of leaseholders and renters.

Tuareg

Hey, thanks everyone for the responses

I feel totally torn...... went to see a 1 bed flat in a new build which was about 3 times the size of my current studio and was just FANTASTIC. Costwise its actually cheaper than what I'm currently paying once all the bills ( rent, mortgage, CTax, ground rent etc) have been totted up.

I know a few people that have gone this route and they all pretty much say what I posted in my original post which is obviously concerning.

The brutal fact is 1 bed flats around here start at about £160,000. I've spent about 5 years and I'm no closer to buying anything. I'm thinking that this is the way to go but wanted to know if there was anything I should know that made SO a complete No No. Beggars can't be choosers I guess.

I don't want and investment I want my own HOME!!!!!!

humadoon

Tuareg wrote: »

Hey, thanks everyone for the responses

I feel totally torn...... went to see a 1 bed flat in a new build which was about 3 times the size of my current studio and was just FANTASTIC. Costwise its actually cheaper than what I'm currently paying once all the bills ( rent, mortgage, CTax, ground rent etc) have been totted up.

I know a few people that have gone this route and they all pretty much say what I posted in my original post which is obviously concerning.

The brutal fact is 1 bed flats around here start at about £160,000. I've spent about 5 years and I'm no closer to buying anything. I'm thinking that this is the way to go but wanted to know if there was anything I should know that made SO a complete No No. Beggars can't be choosers I guess.

I don't want and investment I want my own HOME!!!!!!

where are you looking?

h007

Tuareg wrote: »

Hey, thanks everyone for the responses

I feel totally torn...... went to see a 1 bed flat in a new build which was about 3 times the size of my current studio and was just FANTASTIC. Costwise its actually cheaper than what I'm currently paying once all the bills ( rent, mortgage, CTax, ground rent etc) have been totted up.

I know a few people that have gone this route and they all pretty much say what I posted in my original post which is obviously concerning.

The brutal fact is 1 bed flats around here start at about £160,000. I've spent about 5 years and I'm no closer to buying anything. I'm thinking that this is the way to go but wanted to know if there was anything I should know that made SO a complete No No. Beggars can't be choosers I guess.

I don't want and investment I want my own HOME!!!!!!

I am in a SO flat (40% of a 160k flat). I needed to move pretty quickly and only had about 7k in savings. I live in south east london so there was no way I could afford to buy outright!!

I therefore had the choice of either private rental or SO. I did my sums and found that SO would actually work out cheaper as my rent, mortgage and service charge come to around £575 which is less than a private rent around here.
You also have the added security of that ownership part.

This year my service charge went down and i got a £200 refund from last year so i find that part pretty good value too.


I would say if you go for SO make sure it is somewhere you would want to live for a while in case like me you would need to save for years/win lottery to buy outright!

Middy

I have a SO flat - 50/50. Reason is that with my job, I am able to get a max of £65k mortgage - 2 bedroom flats are around £110k and houses £120k.

Its probably the best thing I have ever done. I must be one of the few people in the UK that has put down a bigger deposit than the mortgage taken out! £30k/£28k respectively. Mainly inheritance and a few thousand profit from a property that me and my ex had. The monthly bill for mortgage/rent/service charge is £335. If I rented a similar sized property in the area, it would be £200 more - which is my bills for CT, leccy, etc.

cottonhead

Like you Im considering SO at the moment as we need a bigger place and dont have much equity to move up. The housing association said they would consider us - the criteria isnt as strict as it used to be.
My only worry is the area. I know it sounds terrible but round here all the housing association places seem to be in dodgy areas filled with anti social behavior and dodgy families. I am half ashamed to say thay when we were looking to buy outright we always asked was there any social housing near by so we could avoid it. Thats just how it is here. In other areas I have friends who are in housing association places and its a great place so before anyone shoots me down I am not being snobby!
Would you be able to rent a cheaper place and have any money left to save? We are thinking of just being patient and waiting for a bit longer. I am so worried about going for it only to find ourselves stuck in a terrible area with no escape ( because its a new build and we dont know how it will turn out).
If you know the area then thats different. Good luck in whatever you decide.

gazfocus

We're in the process of buying a Shared Ownership house (about to complete in the next couple of weeks I believe).

I genuinely think that Shared Ownership is a good way to get a foot on the property ladder, but as others have said, I would only recommend it if you're looking for a home that you'll be in for a few years. This way you've got more chance of building up equity in the property.

However, I definately think you need to understand exactly what you're getting into so my advice would be to ask as many questions to the housing association as needed until you're satisfied.

In terms of having 100% of the downsides of both renting and owning, I wouldn't necessarily agree. On the Shared Ownership property we're buying there are certain parts of the property that the housing association take responsibility for (i.e. the physical structure of the house). We're then liable for the internal elements of the house (including internal walls).

At the end of the day, you need to work out whether you could afford to buy without the help of a Shared Ownership scheme. In our area, you can buy a small two bed mid terraced in need of plenty of work for £60-£65k. For £62k we've bought 50% of a 6 yr old 3 bed semi in a nice cul-de-sac. Other 3 bed semi's in the area sell for £115 - £140k so without Shared Ownership, we would only every have been able to buy a tiny terraced house on a main road with lots of work needed.

Our payments are going to be roughly £100 per month more than our current rental house but then we'll have a driveway (whereas we currently have to battle for parking spaces on the road), building insurance included and a nicer house in a nicer area.