shared ownership... good deal?

Graham_Devon

Also worth pointing out that as these are new builds, if you do plan to move within say 5 years, you need to factor in the increased price you paid for the new build.

You won't get that back without generous increases in house prices. It's said to be around a 10-15% premium.

On a 180k purchase, thats 18k worth or rent payments....

You need to be there for the long haul, or have generous HPI for this to work in your favour. However, quite a few it seems (from the house buying and selling board) find that their "dream" on the new build site didn't quite work out due to neighbours!

wotsthat

Graham, haven't you purchased on a shared ownership scheme (?).

With hindsight what would you have done differently if anything?

Graham_Devon

wotsthat wrote: »

Graham, haven't you purchased on a shared ownership scheme (?).

With hindsight what would you have done differently if anything?

I have.

But as discussed, this isn't a shared ownership scheme.

Would I do anything differently? In an ideal situation yes. Would I buy another on the same scheme? Yes.

Shared Ownership is slowly dying. Not enough in it for the builders or banks I guess. Shared Equity is something else entirely, especially shared equity available only on a new build.

wotsthat

Graham_Devon wrote: »

Shared Ownership is slowly dying. Not enough in it for the builders or banks I guess. Shared Equity is something else entirely, especially shared equity available only on a new build.

Presumably both schemes are/ were similar in that they are intended to help people get on the housing ladder. Especially people with a small deposit.

I'd be looking at all ways to self-fund a deposit but if that wasn't feasible I'd be having a good look at this.

Would you have taken this scheme if shared ownership wasn't available to you at the time? At the end of the day it's got to be better than renting.

Mr._Pricklepants

https://www.castletrust.co.uk/blog/what-is-the-difference-between-shared-ownership-and-shared-equity-mortgages

Conclusion

Shared ownership is not a lifestyle choice, but the only choice for those desperate to own at least part of a home; shared equity is just one choice available to those who have a choice.

Maybe the article has a VI, but there seem to be so many negatives to shared ownership (rent increases, service charges, HA keeps the freehold/leasehold, can't alter the property), I wouldn't go near it.

But I don't know the fine detail about either scheme, so there could be other factors.

Jim_B_3

Ah, shared ownership. The worst of all worlds. You're paying rent but you're also on the hook for maintenance and you can't do whatever you like with the place. If you sell it for less, you're on the hook for all of that, but if the price goes up, the other party gets a slice. A scheme designed to find a way to feed people to the building industry who were previously considered not worth bothering with.

I'm not up on "shared equity"; is it more of the same?

Graham_Devon

wotsthat wrote: »

Presumably both schemes are/ were similar in that they are intended to help people get on the housing ladder. Especially people with a small deposit.

The very basic aim is the same yes.

The actual schemes are very different though.

Graham_Devon

Jim_B wrote: »

Ah, shared ownership. The worst of all worlds. You're paying rent but you're also on the hook for maintenance and you can't do whatever you like with the place. If you sell it for less, you're on the hook for all of that, but if the price goes up, the other party gets a slice. A scheme designed to find a way to feed people to the building industry who were previously considered not worth bothering with.

I'm not up on "shared equity"; is it more of the same?

You are not up on shared ownership either it seems!

Not your fault though, as I keep saying, shared ownership appears to be the overall description of varying schemes, most of them not actually being shared ownership!

You are no more liable for negative equity than you are any normal purchase.

You can make as many changes as you like. You'll just need permission to do structural changes.

The other party doesn't get a slice of any of the equity you own if the price goes up.

Most of what you say relates to shared equity where the banks and builders have an interest in the property.

Jim_B_3

"The other party doesn't get a slice of any of the equity you own if the price goes up."
"If property prices rise, shared owners will benefit from any increase in value, in proportion to the amount of the property they own. If they own 50% they will gain 50% of any increase." http://www.affordablehomeownership.co.uk/faq.php
This is my meaning; that if the price goes up, the other guy gets a share of that increase.

"Most of what you say relates to shared equity where the banks and builders have an interest in the property"
If you have a definition of shared ownership and shared equity, perhaps it would be useful for you state them rather than simply waiting for other people to make a mistake so you can correct them.


"You are no more liable for negative equity than you are any normal purchase." I acknowledge that you're only on the hook for the loss on your bit of it. I was mistaken here.

"You'll just need permission to do structural changes" Fair enough. I wasn't clear here. My meaning was that you need to ask permission of a third party, whereas if you own it, you don't. Just like renting, where you'd need to get the landlord to approve anything of that nature.

wotsthat

Graham_Devon wrote: »

The very basic aim is the same yes.

The actual schemes are very different though.

What I'm trying to work out is whether, on balance, you would've taken a shared equity scheme if the only alternative had been renting.

Near me a bunch of people have bought on the Help to Buy scheme - they seem happy enough. If I'm correct in thinking that the land registry records only the sum of equity that has been transferred under the scheme (80%) then it appears that they've paid more than the people who self funded a deposit.