Part owned flats

lucy_w86

sandanista wrote: »

With shared ownerships, you simply have to look into each project on its own terms. I am currently purchasing a two-bed property (new build) in London. I´m purchasing 25% of the purchase price (235k) and renting the rest from a large HA which will remain nameless. I personally would be wary of going into a shared ownership deal with a private company. The property is not in central london, (zone 4), but is in a borough where prices have always been traditionally high and have pretty good schools. There is absolutely no way I could have bought a property in this area (which is close to my elderly parents) using the traditional method home buying.

The property comes carpeted and with a cooker, which right now is a god send. Although the flat is painted in magnolia (ugh), it will do for now! I don´t have to do anything to it. It´s ready to move in.

I can´t speak for the rest of the country, but in London, many people simply would not be able to buy a home without using the shared owneship method. Do your research before dismissing completely.

Sorry - wrong person in above post...

I am zone 4, what scheme did you use?

Bargain_Rzl

I know you didn't mean to ask me that question, but mine is through Southern Housing Home Ownership.

If you are seriously considering Shared Ownership (and it is certainly not suitable for everybody's circumstances) I recommend you start by registering with Housing Options. This acts as a joint point of contact for most (all?) of the London housing associations, and enables you to put yourself in contact with all of them in one go rather than registering with them separately.

You fill in a lengthy online form about your housing needs, occupation (whether keyworker or not), place of work, current borough of residence, income (generally speaking in London most schemes specify a minimum income) and so on. Once you're signed up, they will send you details of any property that comes up that you're eligible for.

A lot of the schemes are keyworker-only, but there are still plenty that are not. And though most of the schemes try to give priority to "locals", the boroughs team up into groups so you are eligible for schemes across a few boroughs. My scheme, for example, was open to residents of Southwark, Lewisham, Bexley, Bromley and Greenwich, though the property itself is in Southwark.

lucy_w86

Bargain_Rzl wrote: »

I know you didn't mean to ask me that question, but mine is through Southern Housing Home Ownership.

If you are seriously considering Shared Ownership (and it is certainly not suitable for everybody's circumstances) I recommend you start by registering with Housing Options. This acts as a joint point of contact for most (all?) of the London housing associations, and enables you to put yourself in contact with all of them in one go rather than registering with them separately.

You fill in a lengthy online form about your housing needs, occupation (whether keyworker or not), place of work, current borough of residence, income (generally speaking in London most schemes specify a minimum income) and so on. Once you're signed up, they will send you details of any property that comes up that you're eligible for.

A lot of the schemes are keyworker-only, but there are still plenty that are not. And though most of the schemes try to give priority to "locals", the boroughs team up into groups so you are eligible for schemes across a few boroughs. My scheme, for example, was open to residents of Southwark, Lewisham, Bexley, Bromley and Greenwich, though the property itself is in Southwark.

Thanks for that...

I keep hearing people say that if you cant afford to buy in the normal way now then you are never going to be able to buy the other percentage from the other party.

But the way I look at it is that it is a step on the ladder, Try to build up some equity which can be used as a deposit when you move. Or am I being stupid!?

seven-day-weekend

I know next to nothing about these schemes, but it seems to me that if it works out the same as, or cheaper than, renting the entire property then it's surely worth investigating.

Good luck!

Bargain_Rzl

lucy_w86 wrote: »

Thanks for that...

I keep hearing people say that if you cant afford to buy in the normal way now then you are never going to be able to buy the other percentage from the other party.

But the way I look at it is that it is a step on the ladder, Try to build up some equity which can be used as a deposit when you move. Or am I being stupid!?

Not stupid at all. But do your research thoroughly - it may or may not be for you.

As I said in my earlier post, SO is much cheaper in my case than any alternative other than lodging/house-sharing. In fact the going rate for a large room in a decent London flatshare isn't that much different from what I pay for my flat.

I calculated various possibilities and the majority of them worked out in my favour. If the market continues to rise, I make money on my equity. If it drops, I can buy the remainder at a knock-down price. If it stays level, I'm still in a position to pay off my small mortgage quite quickly and then either buy the rest (on a mortgage which would be easily affordable) or continue to rent the rest (on what is effectively a long term, low rent, secure tenancy).

The only possibility which would work out badly for me would be if I had to move before having gained enough equity in the flat to cover costs. My personal circumstances (job, ties to London, being in good health etc) make such a possibility pretty small.

Just be sensible and do your sums. Make sure it works for you. I would never have gone for SO if I have had to overstretch myself for it.

Gigabyte_2

Okay, so we are looking into the Newbuild Homebuy scheme to buy somewhere in London. The way we figure is that we need somewhere to live, might aswell get a bit of equity behind us rather than wasting money on renting.

I understand the scheme pretty well and we have registered with and been approved by our relevant Home Buy agent, so now we just need to sort out some of the financially bits, oh and actually find a property. So my question is:

Once we find a newbuild flat, given that developers are looking to shift them at the moment, what do we negotiate on? - Obviously never pay the ticket price, but with this part rent part buy scheme do you negotiate on the whole price, the percentage price, or the percentage that you will buy?

eg: - Full price of flat - 250k,
25% is what 62k (ish)

do we say, well we can pay a bit more for a 45% stake or say we will pay 55k for a 25% share? does this make any sense to anyone?

CHR15

I have no significant knowledge of these schemes so apologies if I am talking rubbish..

The option of increasing your stake in the property in 10% chunks may sound simple..... but is it really realistic??

10% of a value of £149,000

Can you REALLY save over £14,000 without touching it??

If you can... would you REALLY dump it all into the house and not bother with the new car, holidays etc??

If you are in a position to save up those sort of sums of money, you could probably buy on the open market so wouldn't even be looking at these schemes.

There does seem to be some success stories, but there are at least as many horror stories about people who have bought into them (Council tenants moving in next door, valuations not as expected come time to sell etc).

I just hope everyone does as much research and objective questioning as Bargain Rzl has done before signing up.

echelon_2

Gigabyte wrote: »

Okay, so we are looking into the Newbuild Homebuy scheme to buy somewhere in London. The way we figure is that we need somewhere to live, might aswell get a bit of equity behind us rather than wasting money on renting.

Why is having equity good when house prices are dropping ~2% a month?

Also with these schemes you still have to "waste" money on renting the remainder of the property. Is this post a wind-up?!

Gigabyte_2

Well we still need somewhere to live and I'd rather build up some equity than nothing, these schemes work out much better value for money - (at least in London!) Its cheaper to do this than to rent somewhere. So house prices are dropping, meh, they will come back up again they always do, we are planning to stay in the property for quite a long time and the flexibility to buy more percentages is always there during the 25year mortgage life time. So as our wages go up we can increase the mortgage and own the whole thing. By that point (hopefully) houseprices would have stabilised and we can move on and buy a 'proper' house.

The way I think, even if this scheme is a load of rubbish and you end up having to sell up and only make 50quid then its 50quid more than we'd have made if we had continued to suffer at the hands of London Landlords. I was just wondering - (as house prices ARE going down) what kinds of Bargaining chips we have as first time buyers with mortgage in place and only 2 weeks notice to give on a rented flat?