Offered a Shared Ownership flat - good idea?

Jonny_Debt

Hi

I am looking for some advice. My partner and I have been offered a shared ownership flat in a new development in Brighton. The development is called 'the edge' and can be seen here. http://www.theedgebrighton.co.uk/home.html.

The 2 bedroom flats are priced at around £250k which doesn't seem too bad for Brighton. We have looked around one of the flats and it is really lovely and a good size with 2 double bedrooms. We are actually renting a very similar flat at the moment (by the same housing association) and all the fixtures / fittings are the same which are of a good quality.

We have 2 options.

1) Go for this shared ownership property - the initial financial assessment has shown that we can buy a 65% share - if we did this - the mortgage & rent & service charge would be the same as what we are paying now for rent - and we could move a friend in to the second bedroom which would help pay the mortgage. (We have checked - and we are allowed to have a lodger).

2) Use the new 5% deposit scheme to buy an older house outright. This would probably mean we would have to move out of Brighton a bit to be able to afford it. This would then probably mean it would be more difficult to rent out the second room and we would have to travel to work. (We both work in Brighton).

When we initially started thinking of getting onto the property ladder - we didn't want a new build flat - we wanted an older house with garden. But maybe a flat in this development could be a good idea for a few years?

For info - I am about to turn 40 and my partner is 37.

Any advice / thoughts would be much appreciated! Thanks

zabi89

I would go for option 2. What happens with option 1? Who owns the other 35% of the property? Does it belong to a regular person like myself or can potentially be sold to be person?

You could if I am understanding this correctly end up sharing your flat with a total stranger since they'll own 35% of the property. I'm not sure about this though. That's why I would go with option 2.

Jonny_Debt

Hi. The other share is owned by the housing association. It is the government backed Shared Ownership scheme which is designed to help first time buyers onto the property ladder. You buy a share of the property and pay discounted rent on the remaining share. You can buy more shares at a later date. Hope this clears things up!

zabi89

Jonny_Debt wrote: »

Hi. The other share is owned by the housing association. It is the government backed Shared Ownership scheme which is designed to help first time buyers onto the property ladder. You buy a share of the property and pay discounted rent on the remaining share. You can buy more shares at a later date. Hope this clears things up!

So this share can't be sold to anyone else? If that's the case then that sounds good to me but if It can be sold to just anyone, I sure as hell wouldn't want anyone walking into my house/flat who I didn't know but owned the other share lol :P

Jonny_Debt

Hi - yes, that is correct. The other share can't be sold to anyone else.

Jonny_Debt

Here is a link to the scheme. https://www.gov.uk/affordable-home-ownership-schemes/shared-ownership-schemes

Really can't decide what to do!

SerialRenter

Make sure you read a few articles regarding some of the horror stories that have come out of this scheme, such as rent prices increasing fast, unable to sell your share, HA controlling the sale price and who it can be sold too, etc etc.

aileth

Read, read and read about SO. We live in an SO house and it's been good for us, our HA haven't destroyed us with crazy rent rises, I think it's been about £8 over three years, and we're very comfortable and content.

HOWEVER, there are lots and lots of horror stories, especially of SO flats and service charges. It seems to work great for some and nightmare for others. See if you can google and find any stories regarding other people's experience of that HA on other sites they've built and managed.

Jonny_Debt

Hi - thanks for the info - I did try to Google for info about Southern Housing shared ownership but couldn't find anything. I have been reading lots about shared ownership - some good - some bad. It is so difficult to know what to do!

Shared Ownership in Brighton or Buy outright outside of Brighton?

I am going to have to make a decision soon but I am 50/50 at the moment

Tixy

If you can afford it I'd go for full ownership of an older house with garden.

But obviously factoring in exactly how far away you will be from where you work and the cost of travelling in to work.

This would probably mean we would have to move out of Brighton a bit to be able to afford it.

I'd be reseaching just what you would be likely to be able to afford and if there would be any chance of being able to still buy in the city (assuming that you would prefer to live in the city longer term).

Kynthia

I'd never recommend SO for someone who can afford to buy outright, especially if you're not looking to stay in it long term. I think SO has it's place when people are renting but need long term security and want to make a place their own. However they can be difficult to sell, if they're a new build they also often drop in value for the first few years, plus you don't have the freedom of full ownership such as being able to rent it if needed.