Shared Ownership advice

CharlieRabbit01

This shared ownership has come up near me, I've rented for years and never been that bothered about buying, but I do always look at whats around.

Can anyone explain shared ownership? What sort of money do I need etc. My current rent is 750pcm.

These are the details provided on the website:

Full description:
A 2 bedroom FLAT available through our Shared Ownership Scheme

Available for £61,500 for a 30% share based on the full market value of £205,000
Monthly Rent - £328.99
Monthly Service Charge - £83.16
Total Monthly Charge - £412.15 PLUS MORTGAGE REQUIRED FOR A 30% SHARE

kingstreet

You will buy only 30% of the property, leasing the other 70% from a housing association.

You'll pay the noted rent and service charges on top of the mortgage you'll need to purchase your share, which will normally be 95% or less of the 30% share price.

You can purchase further shares in future, a process known as staircasing and you have the option of paying stamp duty at the level of the full property value now, to avoid paying more later if you do plan to staircase up to 100% ownership.

You'll have the usual costs, such as mortgage, valuation, legal and survey fees and may have to pay some of the HA's legal costs in some circumstances. Check that with them before you purchase.

If you do wish to consider this, contact the HA first as you have to be vetted by the local HCA HomeBuy Agent to ensure you meet the SO criteria.

Idiophreak

CharlieRabbit01 wrote: »

This shared ownership has come up near me, I've rented for years and never been that bothered about buying, but I do always look at whats around.

Can anyone explain shared ownership? What sort of money do I need etc. My current rent is 750pcm.

These are the details provided on the website:

Full description:
A 2 bedroom FLAT available through our Shared Ownership Scheme

Available for £61,500 for a 30% share based on the full market value of £205,000
Monthly Rent - £328.99
Monthly Service Charge - £83.16
Total Monthly Charge - £412.15 PLUS MORTGAGE REQUIRED FOR A 30% SHARE

Take care - by the time you get the mortgage, you won't be a million miles short of your current rent...Don't forget to add on any bills currently covered by the rent (insurances etc).

There have been numerous accounts of significant rent and particularly service charge hikes, which can quickly make SO quite an expensive option.

Also note that "full market value" is normally misleading...how much would the place really sell for on the open market? I'd suggest 180k tops.

If you could find 10% deposit and push the term of your mortgage out, you could probably own the whole place for < £750/month.

Of course, that's a big "if"

Tumtitums

As a first time buyer i have looked into these things and noted the following
i) A lot of lenders dont like shared ownership
ii) Make sure you meet the income requirements
iii) Interestingly when you add the cost of the mortgage to the cost of the rent then you are probably still going to be paying the same amount as you pay now in rent

CharlieRabbit01

How much deposit would be expected as a minimum? do i need to be in a position to buy to get vetted?

CharlieRabbit01

Idiophreak wrote: »

Take care - by the time you get the mortgage, you won't be a million miles short of your current rent...Don't forget to add on any bills currently covered by the rent (insurances etc).

There have been numerous accounts of significant rent and particularly service charge hikes, which can quickly make SO quite an expensive option.

Also note that "full market value" is normally misleading...how much would the place really sell for on the open market? I'd suggest 180k tops.

If you could find 10% deposit and push the term of your mortgage out, you could probably own the whole place for < £750/month.

Of course, that's a big "if"

I would say the full market value for this area is about right, recently a 1 bed and 2 bed sold for £190k and £215k respectively.

Unfortunately due to renting we are far from getting a large deposit.

CharlieRabbit01

Tumtitums wrote: »

As a first time buyer i have looked into these things and noted the following
i) A lot of lenders dont like shared ownership
ii) Make sure you meet the income requirements
iii) Interestingly when you add the cost of the mortgage to the cost of the rent then you are probably still going to be paying the same amount as you pay now in rent

i) will have to look at this
ii) I'm sure we do meet the income requirements
iii) indeed I expect we will be paying a very similar amount however would being in a shared ownership be better than renting?

kingstreet

There are one or two 95% products around for shared ownership, but most of the market is at 90% or less.

AFK_Matrix

One other thing to consider between renting and SO is maintenance. In rented the Landlord is responsible for the upkeep of the flat/house in SO you have all that responsibility and yet you are still renting it out effectivley.

I would stay renting, cut your cost by going on the debt free wannabe section and save up at least a 10% deposit and buy a normal house/flat.

CharlieRabbit01

we have already cut our costs down as much as we can but only managing to save around £100 a month each and the bit we had saved got eaten up when we had to move recently (April) and paid out all the rental costs again.

CharlieRabbit01

we're looking at around £20k deposit to stay living locally.