Share ownership questions, please help.

Kal1980

Hi Everyone,

I have been reading about shared ownership, on this forum, and what concerns me the most is the rent and service charge going up every year, and how it has affected some people to the point where they can't afford the rent. I would like to save for 10 years or less in a 1 bed room so I can save a large enough deposit to own a house outright.

I am in the position where I might only be able save no more than 10k, although I will try and save as much as I can while I am at my dads.

I would like to know from others who are already in a shared ownership build, how much their service charge and rent has gone up by. What do the housing associations base the raise of rent/service charge on? Is there a cap to how much it can go up by? and what are the chances of rent and service charge going down?

My other question is would it be wise to look for resale instead of a new build? I have heard a lot about new builds being overpriced, and a lot of people are in negative equity.

My last question, would it be wise to get the lowest share for a 1 bed room, so I can save more for a deposit large enough to own a house outright? Or would it be better to own 50% or more? I a m currently on £1800 a month after tax, so this is why I am looking for share ownership with lowest share to save.

Has anyone had experience with Amicushorizen? I live in Croydon area, Surrey.

Thanks for reading.

kingstreet

The rent does not increase. The rate is capped by the HCA at 3% and the current rate on new leases is typically 2.75% of the value of the unowned share.

richardw

Service charges for some 1 beds can be ludicrously high, some are over £150 per month.
If the building is small, there are fewer flats to share costs such as a lift.
Rising service charge costs are a problem for private flats, it's a flat disadvantage anyway.
Negative equity is a falling property market fact.

Would something like this https://www.sharetobuy.com/london/sharedownershippropertydetails?id=12855 be affordable for you?

IronWolf

aiui the rent portion is calculated as a % of the value of the flat (portion you dont own) so wont keep going up.

The service charge usually does go up, if you look at new build services charges vs resale you can get an idea of how much it will end up going up by.

Blondetotty

I've been in a shared ownership on a 50% share for 7 years. My rent on the remaining 50% has increased by about £3-£5 a year since then. It will be in your lease how the HA calculates rent increases. I can't remember off the top of my head exactly how mine is calculated but it is something to do with the RPA.

Service charges are a whole new ball game though. When we (5 flats) moved into a new build all as first time buyers the SC was £10 a month and we were all told this wouldn't increase much over the next 10 years or so. Roll on 1 year later and the estimated charges were £150 a month as they decided to add in a sinking fund and they also told us they had miscalulated the grounds and cleaning charges.

We all complained and ended up taking over the grounds and cleaning ourselves and the bill was reduced to about £40 a month. At the moment I believe we're paying around £60/£70 as we've just handed the gardening back over to them.

With hindsight I wouldn't have got into bed with a HA either with shared ownership or renting. They pretty much have you over a barrel and every year it's another rule or regulation they want to enforce, not enforce, charge for, or change and we can do nothing about it. 90% of my stress level is because of dealing with them and yes I will name and shame - Hyde Housing Association.

I appreciate the schemes sound great esp the flats but if you really really do have to go down a SO route, make sure you thoroughly check out the HA, some are worse than others. Talk to owners that have owned for longer periods and check the leases over thoroughly. Try and also go for a house on SO rather than a flat as at least you wouldn't have the communal charges such as gardening and cleaning to worry about.

Good luck

Blondetotty

Sorry, I also wanted to add if you have the option of staying where you are and really knuckling down and saving to buy outright then do that. There are so many schemes around for first time buyers and hopefully they will still be around in a few years from now rather than subjecting yourself to an SO.

If I could do this all over again I'd have done that and been in a small but (hopefully) hassle free house with no-one to answer to except myself.

££sc££

rent increase is defined in lease but often something like RPI + 0.5%

service charges won't increase a a percentage, just by how much the services cost to provide. they could go up a lot, a little or not at all. some of our have gone down. but they must be reasonable and reflective of actual costs

Guest101

New builds are rarely worth it, the building has no history, and based on the 'Persimmon homes' posts on here, the quality isnt great.

I'd much rather buy 1940's or 50's builds which, whilst might need some TLC and some maintenance, are generally a high standard.

Kal1980

Thanks for all the replies, I will take in to account what everyone has said.

Kal1980

Blondetotty wrote: »

Sorry, I also wanted to add if you have the option of staying where you are and really knuckling down and saving to buy outright then do that. There are so many schemes around for first time buyers and hopefully they will still be around in a few years from now rather than subjecting yourself to an SO.

If I could do this all over again I'd have done that and been in a small but (hopefully) hassle free house with no-one to answer to except myself.

Thanks for the info, SO does seem like a bit of a hit and miss, like you said you are at the mercy of the HA increasing service charge etc. That won't help me if I am trying to set a budget for saving. I spoke with my sister and she said I can stay at hers if my dad sells up, so I might have the opportunity to save enough, just means hopping from one family member to another.

Also the help to buy scheme out in jan 2014 for three years sounds a lot better.

Kal1980

richardw wrote: »

Service charges for some 1 beds can be ludicrously high, some are over £150 per month.
If the building is small, there are fewer flats to share costs such as a lift.
Rising service charge costs are a problem for private flats, it's a flat disadvantage anyway.
Negative equity is a falling property market fact.

Would something like this


Sorry for the late reply, I have had a look at the link and it could be a bit over budget for me, if I am to put away at least £300 for 10 years or less. I did manage to find one bedroom flats, 2 miles away going for £500/600 if I were to go for SO.