Consequences of shared ownership

lynzpower

I can see the reasons why, but this rule does cause problems for some people. My friend is a junior doctor. He was eligible for keyworker SO and considered it while he is working in London, but with the current uncertainty of employment for junior doctors he may have to live elsewhere next year. He turned it down because of the rules preventing you from renting it out.

theres also key worker capped renting., It can be pretty good value, although it is rathr scarce, I considered renting a flat which was 100 a week ( one bed, zone 1)

Bargain_Rzl

Rimo2021 wrote: »

Personally I don't think the government should really be subsidising private purchases. I think they should make renting more attractive in terms of security of tenure and controlled rent rises and less attractive to 'amateur' landlords. I think this would reduce competition for FTB properties and cool the prices to some extent.

I agree with this, in principle - but do you realise that a large proportion (majority?) of shared ownership schemes have no government subsidy, and are a result of deals made between developers and housing associations?

AFAIK the government only provide subsidy to key-worker-only properties. In my building two of the flats are under a keyworker scheme but the other eight (including mine) are privately funded.

Rimo2021

Bargain_Rzl wrote: »

I agree with this, in principle - but do you realise that a large proportion (majority?) of shared ownership schemes have no government subsidy, and are a result of deals made between developers and housing associations?

AFAIK the government only provide subsidy to key-worker-only properties. In my building two of the flats are under a keyworker scheme but the other eight (including mine) are privately funded.

Yes I think privately funded schemes are fine in principle, and to a certain extent (because of the tendency for people to 'settle down' with a permanent partner later than used to be the 'norm') I think such schemes make sense for lots of people. I think its probably better that an organisation owns the other half of your property than a friend who may develop of conflict of interest with you or a g/f or b/f who you're not yet at the stage of wanting to make such a hugh joint financial committment with.

I was really thinking of the government scheme which was along the lines of the individual bought 50%, a participating B/S bought 25% and the government bought 25%. In this scheme (I read the proposals but don't know if it went beyond that) if the property was sold and had decreased in value the governments share was to bear the loss of up to it's 25% before the other shares were affected! Personally I just don't agree with this. Of course I think it's awful that property has become so unaffordable for FTBs but I would rather see changes by the government in tenancy laws, making BTL much less appealing by raising the responsibilities of LLs, increasing security of tenure and reducing the liquidity and hence loan availability of the properties which may have sitting tenants and controlled rent rises.

That way renters could have proper 'homes' and so what if they don't own them? I have my own place but with a large debt secured on it effectively I don't really own it either.

Mrs_pbradley936

Rimo2021 wrote: »

Personally I just don't agree with this. Of course I think it's awful that property has become so unaffordable for FTBs but I would rather see changes by the government in tenancy laws, making BTL much less appealing by raising the responsibilities of LLs, increasing security of tenure and reducing the liquidity and hence loan availability of the properties which may have sitting tenants and controlled rent rises.

That way renters could have proper 'homes' and so what if they don't own them? I have my own place but with a large debt secured on it effectively I don't really own it either.

I just put this on another thread where you made a similar point. Some things you mention have be tried but then changed because they are not working as well as was hoped.

We used to have the system you are describing. The downside to it was that places were left empty because a landlord could not give reasonable notice and get vacant possession. A property with what was known as “a sitting tenant” was worth far less than one with vacant possession. Also Council housing was let under similar conditions to those you mention and as we all know they were sold off. We may think it was a bad idea in hindsight but lots of people bought them so it must have been a popular policy.

Bargain_Rzl

Rimo2021 wrote: »

That way renters could have proper 'homes' and so what if they don't own them? I have my own place but with a large debt secured on it effectively I don't really own it either.

Absolutely. If tenancies were more secure and affordable, I would have been happy to rent long-term. Instead of diverting my savings towards mortgage overpayments I would have made alternative investments. But as it is, I feel insecure renting - a few years ago for reasons beyond my control I had to leave a rented house-share I loved because the place was being sold, and the next place lasted only 8 months before I had to move because my housemates' circumstances changed. I didn't have much money at the time but I had started saving - in the space of a few months my savings were wiped out by two lots of moving costs.

For me, the only way I can feel secure in my home is to have it to myself, and to have a stake in it - so that my own circumstances alone determine my ability to remain there for as long as I like. A secure, rent-controlled tenancy (with an obligation on the landlord to ensure prompt repairs etc) would fulfil this need for me just as well as my SO property does. Incidentally, my current housing costs (mortgage+rent+service charge) are about £100 less per month than they would be if I was renting, and over £200 less per month than they would be if I owned 100% of my flat.

littlesaint

Me too. As I have said on other threads I have lived in London for nearly seven years and I have lived in six different properties in that time.

Rimo2021

pbradley936 wrote: »

A property with what was known as “a sitting tenant” was worth far less than one with vacant possession.

But I don't think thats necessarily a bad thing. It meant you couldn't make a quick easy buck out of BTL and would put off the daft amateur BTLetters who have been driving up prices and allow serious business landlords to get on with providing a proper regulated service

pbradley936 wrote: »

Also Council housing was let under similar conditions to those you mention and as we all know they were sold off. We may think it was a bad idea in hindsight but lots of people bought them so it must have been a popular policy.

Of course it was a popular policy with those who benefit !!! The current easy terms for providing rental accommodation is popular too - with the landlords though not necessarily with their tenants !

Mrs_pbradley936

Rimo2021 wrote: »

But I don't think thats necessarily a bad thing. It meant you couldn't make a quick easy buck out of BTL and would put off the daft amateur BTLetters who have been driving up prices and allow serious business landlords to get on with providing a proper regulated service



Of course it was a popular policy with those who benefit !!! The current easy terms for providing rental accommodation is popular too - with the landlords though not necessarily with their tenants !

They do not let market forces have a free hand everywhere, my friends have a place in France and the local major has to approve the price if you want to sell. Also your tone seems to be blaming me for the situation here - I wish I did have that much say in what goes on, as it was I was only telling you that what you were suggesting has been tried.

Rimo2021

pbradley936 wrote: »

They do not let market forces have a free hand everywhere, my friends have a place in France and the local major has to approve the price if you want to sell. Also your tone seems to be blaming me for the situation here - I wish I did have that much say in what goes on, as it was I was only telling you that what you were suggesting has been tried.

Of course I'm not blaming you for the situation - you (unless you're keeping quiet about a very influential position ;-) have no more control over the market than I do.

You talked about women's relatively recent access to credit and the newish phenomenon of people who can't afford a whole house buying it in part or in stages as pushing up house prices. All I'm doing is suggesting that these 2 factors are areas which may be contributing to HPI but which I for one would not wish to change.

I'm suggesting that the new BTL bandwagon is a much bigger factor (at least bigger than the 2nd of th 2 factors you mention) and that a solution for this might be to give tenants more security of tenure which would make investment properties less attractive investments (since less liquid and less easy to get loans on) to any but serious long-term business landlords. Many amateurs are buying properties at a price that gives them no return on their investment other than potential capital gain. This is pushing up prices as others jump on the bandwagon and FTBs struggle to compete.

I know you're saying this has been tried before but you haven't explained why you think it failed?

Personally I would like to see longer -term (and I'm not necessarily saying for life) security of tenure so that it is a real alternative to buying.

sandanista

I have just submitted my mortgage application for a shared ownership property. It is simply the only way I could afford to buy in the bit of London I want to live in which is close to my elderly parents. I've been iffing and butting about shared ownerships for the last 4 years. But I realised that the longer I did so, the longer I was keeping myself off the property ladder.