Is shared ownership really worth it??

shelleywa

Hi all,

The contract expires on my rental property soon and my parents suggested now would be a good time to get on the property ladder through a government scheme. I've looked at the schemes available and the only one really feasible for me is the shared ownership scheme. I have spent the last 3 weeks doing facts and figures with the relevant people and am now ready to start viewing houses.

However, I've also noticed some negativity along the way, in forums and such, and today I stumbled across this article: http://www.independent.co.uk/property/house-and-home/property/shared-ownership-dreams-shattered-7878446.html

Is it true that you can't rent out your house if you go travelling for a year (which is likely in my case)?

It all just seems to have a lot of little traps throughout that are out of the buyer's control and all of a sudden it's become a lot less appealing.

For any 'experts' reading this and more in the know than I am, is shared ownership, in your opinion, a bad idea/too risky for young first time buyers?

Thanks!

Fire_Fox

Worth running and advanced search, this has been debated at length and the pitfalls covered many times.

kingstreet

This is social housing. It isn't designed for those who want to live away and subletting is normally specifically prohibited in the lease.

FeistyFidget

We have a flat under FTBI and no you are not allowed to sub let, or deem to make any kind of an income on your property (this includes taking in students etc).

There is a lot of negativity on the forums about shared ownership, but I personally think it is a good thing providing you do your home work. If you will be paying less then what you would for rent (taking into account mortgage, rental fees and hidden costs such as admin, ground rent and maintenance) then you can put the surplus money into saving for a deposit on a fully owned home.

Make sure you check carefully about re-sale terms. Lots of people have said it is difficult to sell the property as you must sell to another shared ownership person. Not all schemes are like this though, ours can be placed on open market for current value - government will just scoop us 49% of any 'profit' we make.

bitsandpieces

Generally you aren't allowed to sub-let (if the rent on the part you don't own is subsidised, I think it's fair enough that you can't rent out to make a profit on this...) Bear in mind that some leasehold places don't allow subletting anyway or apply set rules - so check for this whether or not you buy shared ownership, if you'll need to rent out.

Kynthia

It's usually not as good as completely owning your own home and does have restrictions and difficulties when selling. However some of the issues are the same as encountered in many leasehold properties

Loopylou1802

Hi Shelley,

Myself and my Husband have had a Shared Ownership for over 6 years now. It was the only way we could get on the property ladder and has really helped us. We loved the new house when we moved in but are now ready to upsize. I can't say we rushed into it as we waited a year for it to be built but we didn't think about the people that were living around us. They are noisy, loud Housing Association tenants that do not care about the properties they rent.

We also signed our lease before they brought in regulations in 2010 stating no more than 3% can be charged on the initial rented half. We are stuck paying 4.36% as well as rental increases every year. We are struggling to sell as not many people can afford our rent and a mortgage and our Housing Association will not buy our share back.

They can be a good thing but just be wary regarding what your lease actually includes and the people that live around you. They are advertised as affordable housing but in our opinion that's not always the case.

Hope this helps!

Loopy

Mallotum_X

Short answer - No its not worth it.

Longer answer - read through many of the threads on here and then dont do it.