Co-ownership for first-time buyer in NI

clairej89

Hi there

Just looking for a bit of advice from those older and wiser or who have been through the process before.

I live in Northern Ireland and at the minute house prices are very low. For a small 2 bed property we're talking about £60k.

I was renting with my boyfriend but have recently split up and moved back in with my mum. Needless to say I am very keen to get out again but renting on my own is going to be the best part of £500pm down the drain.

Given that it is such a good time to buy, I have looked into co-ownership (through the creatively named 'Co-Ownership Housing Association'). I have some debts at the minute and minimal savings, so ideally I am looking at this from the perspective that:

1) I don't need a deposit
2) Even buying up to 75% share is significantly cheaper than renting on my own
3) This may not actually be equivalent to full-blown home ownership, but for me it means that the money I pay off my mortgage (eg. £30k based on a 50% share of a £60k property) would actually leave me with a deposit for when I do come to get a full mortgage on my own.

I am under no illusions that this is a magical solution and I will make a massive profit, but this does seem like a very sensible option for me given my personal circumstances.

I am currently trying to repay debts and then save a little, so I hope that by the end of the year I will be in a position to apply.

I would appreciate any advice or tips people would have on this, particularly anyone who has perhaps been in the same situation!

Many thanks

Claire

tara747

Don't touch CO with a barge pole.

That's my succinct advice.

Prices are not going to rise anytime soon. In fact, they are likely to fall further.

Stay at home and save like MAD for 12 months for a deposit, you can buy on your own. A £6K deposit is not that much, you'll be better off buying outright.

saverbuyer

Coownership is particularly pointless at this level. Your legal fees and moving costs could be several thousand, you'll have to pay legal fee each time you purchase a share. £2000 could be 33% of the deposit you need to buy outright.

I don't know your area but £500 a month rent on a £60000 house? More like £350 where I live.

I am very keen to get out again but renting on my own is going to be the best part of £500pm down the drain.

It's not down the drain; it pays for the roof over your head. Paying money on mortgage interest and money to co-ownership is money down the drain. Also remember you have other cost with buying you don't have with renting (Rates, insurance, maintenance, co-ownership rent) this could add several hundred a month.

For such a small loan amount, I would just continue to save. You live with your mum; it's unlikily you will ever find living so cheap. Save, save save. Depending on what you earn you could save the money to buy in no time.

clairej89

Thanks for the replies!

I am essentially looking for someone who has been through this process, or knows someone who has - I'm well aware that prices are unlikely to rise, and I am not going to run out and buy a co-ownership property tomorrow; this is something I am thinking about for the next year or so I'm just doing a bit of research.

At the minute I'm paying off some student debts so I'm hoping to save a little - but the perks to me of co-ownership is that the savings I do have can be used for fees and furniture etc, rather than scraping together a 10-20% deposit and then being wiped out.

I graduated a couple of years ago so I'm basically at the start of my career and hoping my salary will increase in the long-term, I earn around £17k now.

An advantage for me is that this is a kind of half-way house to home ownership for me, whilst prices are low.

My house I rented with my boyfriend was worth about £60k and we rented it for £440pm, so for me that is entirely unaffordable on my own.

I'm obviously looking for people who have been through the process also to learn a bit more about the ts&cs and the pitfalls before I approach them (in case my hopes are too high) - for example I have heard lodgers are not allowed and can be viewed as fraud. Those kind of things I would like to know about, as its all useful knowledge to have for my own plans

Seanita

I too am hoping to go co-ownership next year. Thy are very good at answering questions if you give them a ring with any specifics you have.

chrisross22

I have pretty much just bought a house using co-ownership, should be getting the keys next week. Just waiting for all the paperwork to be finalised ans the money to be transferred.I am buying a turnkey house and decided that id rather own a large % of it rather than buy an old house which needs a lot of work or waste money renting.

1st thing to do is get on to the co- ownership website and check out their starter share calculator. This will tell you the % you can but based on the house price. As this is my 1st post I can't give you the link but its at the bottom of their website.

Have a read and look at the docs on their site to see the criteria. Biggest one is no more than £5000 debt excluding student loan and a good credit rating with no late payments etc.

There is a £250 fee which needs sent off with the application form. This is £40 for the house survey and £210 towards solicitor fees. Use a co-ownership approved solicitor and it's much cheaper. We paid about £420 in fees and co-ownership pay the rest. If your buying a house without co-ownership, solicitor fees would be £1000+ in most cases.

The biggest problem you'll have is getting a mortgage, especially being on your own. It's all based on affordability and you need to remember things like buildings insurance, rates, gas/oil, electric etc. We got a mortgage through the Progressive with a 5% deposit.(5% of the share we are buying). Banks no longer take risks with mortgages etc so you'll need a good credit rating also.

clairej89

Seanita wrote: »

I too am hoping to go co-ownership next year. Thy are very good at answering questions if you give them a ring with any specifics you have.

Thanks, that is useful to know as I have held off contacting them!

tara747

clairej89 wrote: »

Thanks for the replies!

I am essentially looking for someone who has been through this process, or knows someone who has - I'm well aware that prices are unlikely to rise, and I am not going to run out and buy a co-ownership property tomorrow; this is something I am thinking about for the next year or so I'm just doing a bit of research.

At the minute I'm paying off some student debts so I'm hoping to save a little - but the perks to me of co-ownership is that the savings I do have can be used for fees and furniture etc, rather than scraping together a 10-20% deposit and then being wiped out.

I graduated a couple of years ago so I'm basically at the start of my career and hoping my salary will increase in the long-term, I earn around £17k now.

An advantage for me is that this is a kind of half-way house to home ownership for me, whilst prices are low.

My house I rented with my boyfriend was worth about £60k and we rented it for £440pm, so for me that is entirely unaffordable on my own.

I'm obviously looking for people who have been through the process also to learn a bit more about the ts&cs and the pitfalls before I approach them (in case my hopes are too high) - for example I have heard lodgers are not allowed and can be viewed as fraud. Those kind of things I would like to know about, as its all useful knowledge to have for my own plans

I know someone who has. I've also read the CO disaster threads on here. That's why I advised you to steer clear.

But that's just my opinion.

emmah89

we bought our house through co-ownership- and we had no problems apart from the fact they were a bit slow (made our offer in may, however there were a few hold ups between co-ownership and other sides solicitors and we didnt get in til october!!). however that being said, we are now paying half the price we paid for when renting for all our mortgage, co-ownership rent and insurance. but we found co-ownership friendly and they always made sure we were kept in the loop of what was going on. however from reading on here, some people havent been as lucky as us. but just thought id give some positive feedback to them!

saverbuyer

I think the key point for me would be, if you can't afford to raise a £6,000 deposit for a house at £60,000, it is highly unlikely you would be able to cover an inevitable unexpected expense that comes with buying a house such as a boiler breakdown or other major repair.

If you can't afford 440 a month how do you expect to afford a 60K debt?

With a 60K mortgage and a 50% share (lowest available) your mortgage costs alone would be £300 a month.

Add insurance, rates, repairs etc. and you aren't far off £440 a month.

I think you may need to adjust your house buying expectations.

qwert_yuiop

clairej89 wrote: »

Hi there


I live in Northern Ireland and at the minute house prices are very low.

Given that it is such a good time to buy,

I'm not sure that house prices are very low - they're just lower than they were- so I wouldn't be certain it's a good time to buy either.