Shared Ownership?

gazfocus

DVardysShadow wrote: »

From where I sit, it looks like SO contributed to allowing people to continue buying at progressively inflated prices and fuelled a boom which would have come to an end earlier without SO.

In other words, I think that SO is a significant contributor to the negative equity problem.

How so when shared ownership properties are subject to the exact same RICS mortgage valuations as every other house purchase out there?

DVardysShadow

gazfocus wrote: »

How so when shared ownership properties are subject to the exact same RICS mortgage valuations as every other house purchase out there?

You have completely missed the point, which is nothing to do with RICS valuations.

Everything to do with increasing the pool of people able to buy. Without shared ownership, the market would have gone off the boil much more quickly.

Where the RICS valuations come in is that while the market was on the boil, the RICS valuatiosn were able to sustain the illusion that house values were what they were, being proven wrong by the extent of negative equity. As you correctly point out these RICS valuations were applied across the amrket.

gazfocus

DVardysShadow wrote: »

You have completely missed the point, which is nothing to do with RICS valuations.

Everything to do with increasing the pool of people able to buy. Without shared ownership, the market would have gone off the boil much more quickly.

Where the RICS valuations come in is that while the market was on the boil, the RICS valuatiosn were able to sustain the illusion that house values were what they were, being proven wrong by the extent of negative equity. As you correctly point out these RICS valuations were applied across the amrket.

Ok, I do see where you're coming from now, however I don't believe for one minute that Shared Ownership is the sole (or even one of the main) reasons for inflated house prices.

If you think about it, all that's happened is developers have gotten greedy. The developers put prices up, knowing people would pay the higher prices because if they wanted a brand new home they had no choice. The more brand new houses that sold at the higher prices, the more greedy the developers got and the more it pushes all of the other house prices up.

No doubt the introduction of part exchanges didn't help either.

fedupnow

We bought 70% of our house 16 years ago and pay no rent. We have never heard from the HO that own the 30% in all that time. We have been saving to buy the 30% outright but keep dipping into the funds for holidays etc. And cars. And all sorts of stuff. Not very MSE. But we are in no rush and under no pressure as this is our home. We raised our children here and have been very happy so have no intention of moving on.

We have been thinking about buying the rest of it recently with the dip in house prices, but I think we'll hang on a little longer see what happens. We can pick our moment and meanwhile our savings are gathering interest (not much, but ya know.) I know the 30% is a hell of a lot more now than 16 years ago, but we wouldn't have had our home at all without the scheme. We'd have still been trying to scrape the deposit together when the boom hit. Probably still be in rented now - or gone without a hell of a lot more than we have done. We did enjoy those hols.

So it does work for some. The article in the Independent pointed out the same problems all house buyers have - negative equity, difficulty selling etc. I do see why the pool of able buyers might be seen to help push the prices up. Not entirely convinced though, it's not a new idea and the scheme is in place now and prices are going down so ...

I think the same rules of caution should be taken as if you were buying outright.

Just my experience and opinion.

vivster

gazfocus wrote: »

That's not strictly true - you just need to remortgage with a lender that lends on shared ownership properties. As far as I know, Nationwide don't.

Nationwide have long been in the SO market. My buyer had a shared ownership mortgage with them. And I'm not so dumb as to have tried to get a non-SO mortgage when I was in a SO flat.

DVardysShadow

gazfocus wrote: »

Ok, I do see where you're coming from now, however I don't believe for one minute that Shared Ownership is the sole (or even one of the main) reasons for inflated house prices.

If you think about it, all that's happened is developers have gotten greedy. The developers put prices up, knowing people would pay the higher prices because if they wanted a brand new home they had no choice. The more brand new houses that sold at the higher prices, the more greedy the developers got and the more it pushes all of the other house prices up.

No doubt the introduction of part exchanges didn't help either.

Exactly. Shared ownership has been a tool of greedy developers.

poppysarah

gaz141 wrote: »

well I just bought one in Mitcham, went into this with my eyes wide open so who knows what will happen. I know quite a few people who bought their own places at the height of the boom who will be stuck for years in neg equity. I'm fed up paying expensive rent to sh*t landlords who take your money and little else and London rents are just getting crazy now, so seems like a good option for me. However, that is just me, everyone will be different. Whatever negatives, I'll deal with them.

"Its the unforeseen factor that has me most worried"

that applies to any home buyer, not just SO

So paying rent on a property you (part) own AND have to repair doesn't strike you as having moved into the land of the insane?

At least paying rent to a normal landlord they have the hassle of repairs.

Middy

vivster wrote: »

The mortgage market is a lot more restrictive, and the bar can be set higher. Nationwide turned me down for a re-mortgage, although told me they would have accepted me if I'd owned outright.

My mortgage is with Nationwide and earlier this year, got a better deal with them.

Rub

I'm looking at different options SO renting I can't afford to buy properties outright. I am looking for the pros and cons of SO