Shared Ownership - is it value for money?

Poolman99

Hi, we know that when you can't get credit and need to buy a car, there are companies out there that will sell to you with a higher interest rate and usually a higher selling price too. This is poor value for money since the buyer doesn't have many options.

I'm just helping my brother out with some shared ownership ideas and was a bit staggered at the choices available. I live in a two bed house worth around £120k. Two one bed flats in similar areas my brother is looking at on a shared ownership scheme are asking for £75k for a 50% share. I asked my brother if he could get a mortgage for the full amount would he spend it on one of these flats? Answer was a flat no.

It seems that if people can't afford 100% for their FTB home, they are being asked for 75% for what might only be a 50% share. This means someone is taking advantage of the situation. Both parties in the shared ownership deal are getting poor value.

I was also suprised to see certain houses being advertised with these deals. When I heard about shared ownership I assumed that you could go and find a house on the free market, then go and talk to your housing association/charity organisation about co-funding it.

Basically I smell a rat, and I think that the FTB's going down this increasingly popular route should ask the simple question - if it were all your own money, would you still buy it? Just because you can't buy the whole thing, doesn't mean you don't deserve value for money.

suki1964

Where do you get the idea that you pay 75% for a 50% share? Is that just based on the costs of properties similier to yours? Do you know that they have been valued the same as your particular house?

As to what properties you can buy it all depends on whos scheme you get on. Most associations will have properties on their own developments for shared ownership. Some, like ours, allow you to buy from the open market as we did.

The house we have a 50% share in was valued at 75k. We took a 35k mortgage - 50%. The only "extra" cost to us were the housing associations legal fees.

Buying shared ownership was the only way we would have got on the ladder, I was a public sector worker and hubby was self employed and he couldnt get a mortgage.
Eight years later our property is now worth 220k, so do the sums.
Value for money? I think so.