Shared ownership or wait?

lindsaygalaxy

Im hoping someome can give me some good advise. We have recently been looking for a house, though in our area realisticaly it is very unlikely:/ Average 3 bed £250k, very little deposit, and im a discharged bankrupt (nearly 5 years).

So we decided to keep on saving and let the bankruptcy go off the file. At the cost of our rent and 2 children savings are on the low side and will take a long time to increase by the thousands that we need.

Today a 2 bedroom shared ownership house came on. It is in a good location (though not the end of town we are after for the right secondary school for DD in 3 years time). It has been split into 3 bedrooms, 1 double and 2 smaller rooms. The overall size is the same as small 3 beds in the area. The total costs of the property is £200k and its a 50% share, so OH could get the mortgage on his own (he has a v. good credit file). Once my br is off the file we and we have saved some more we could afford to buy out the other 50% to own it outright before moving to a bigger house, depending on how the economy is in the future.

I know the pitfalls of shared ownership and have researched it a lot. The rent/service charge is around £400 a month and the mortgage would be around the same, similar to what we pay in rent now, but for a larger detached house with a big garden and garage but not in a very desirable location (though not bad either).

What do people think? Stay renting which means we dont have to pay repairs, slightly bigger house (by about 200sq feet), bigger garden and garage. Or 50% of a house to buy?

Thank you for your help.

rob404uk

If researched well, I would not be put off going for it. Just make sure you really do like the home and you are not getting a step on the property ladder for the sake of it. My experience with shared ownership was not that great. I lost money because I did not look beyond the short term. Yes, they can be hard to sell, but like anything, they will sell at the right price. good luck

lindsaygalaxy

Resells in this area sell very quick for houses (not so much for flats). There are rarely more than 12 properties in the county for sale at one time, and the houses stick around for a very short time. It is also at a reasonable price for the area, thought the rent seems a lots to me (going by their website I would say 4.5% rather than the 3% they claim to charge, so either an error or I would be asking for this to be changed).

Sally22_2

Just make sure that you can actually staircase and buy the other 50% if you do go for it.

We are about to complete on a SO property and from the outset it was either a 40% or 80% share we were told we could buy. When it got to the nitty gritty of the contract stuff, we were told by our solicitor that once we buy the % we had chosen we could NEVER buy the rest.

As for the rent, this includes buildings insurance etc too. As part of our pack we received a breakdown of how they calculate the monthly payments and it seems quite fair.

Will you want to sell in 3 years time to be in a more desirable area for your daughters school?

lindsaygalaxy

The building insurance is covered in the service charge which is a seperate amount. Their website says that you cna staircase, but I will check if you can do it to 100%. We will eventually want to sell, maybe 3-5 years by which time I will be a better salary and so will OH hopefully.