Offered a Shared Ownership flat - good idea?

Jonny_Debt

Thanks for all your replies - it is really helpful.

ethank

Better to own 100% of a house, than 65% of a house.

[Deleted User]

The things that I would consider would be:

a) the rent - how will this be maintained (is it fixed for the duration? is there a ceiling that can be charged? is there a maximum annual increase? how is any increase worked out/justified?

b) you say that you can buy other shares - can you ultimately buy 100%, or does the HA maintain any share? If you own 100% does the property shift from leasehold to freehold (or rather portion of)? or remain lease hold? (assuming that it is lease hold at least while you are part-renting)? Also how often and by how much can you increase your share? And what are the cost implications? (including Stamp Duty etc)

c) what are the service charges? What do they cover? And, like the rent, at what point and by how much could this increase on an annual basis? etc

just some thoughts,

HTH,

D9

Soleil_lune

Personally, I would avoid shared ownership like the plague.

Hope this helps.

Jonny_Debt

Hi! I will make sure I find out about how much they can increase the rent and service charge. As for buying more shares - you can do this at any time (I think - will have to double check) - however, when you buy additional shares - the flat gets revalued and you pay the price of the shares at the current price - we would have to pay for the flat to be revalued. Yes, we can buy 100% of the property.

From the feedback so far - it looks like most people see this scheme in a negative light - this is good to know. Please keep opinions coming as this is really going to help us decide what to do.

Thanks!

[Deleted User]

I would not say that I have seen the scheme in a negative light. I think that the big issue with SO is that the schemes vary so widely (eg how they are managed by the different organisations offering them) that there are some real horror stories out there. You just need to be cautious and be fully aware of all the pitfalls and dangers. I think that re-selling SO properties can also be difficult (but in my area, they are not advertised for long, so can't be unsold for too long). Do check if you were to sell, what restrictions would be in place for your buyer - it may narrow your market (key worker, low income, etc etc).

My brother has a SO in the South (he would never have been able to afford to buy anything commutable to his work otherwise), and generally the scheme has been great for him (the only negative being that he will never be permitted to own 100%, even if he could afford it).

xoAmyox

I have an SO flat. Although the service charge is reasonable and there haven't been any rent increases (yet), I would still recommend that they are avoided.

Being on the top floor, I had terrible problems with water ingress from the roof. I had to take a LOT of time of work for builders, and tradesmen to look into the issues and it never did get resolved completely.

Luckily the water ingress only happens occasionally now, whereas it was frequent before - but you are beholden to the HA and/or original builder to resolve issues that aren't your responsibility.

In this case, it meant that I was in no better position than a renter, and I didn't have the freedom to just move if the problems got too bad.

Jonny_Debt

Thank you everyone for your feedback!

verulamium

Given that hardly anyone builds houses anymore, I would recommend getting a house instead. Brighton isn't too big, and if my memory served me well (I used to live there), the town centre is accessible easily from other suburbs like Lewes and Saltdean.

I have heard too many anecdotal horror stories about SO to recommend it.

RoyalDad

I hate all the people who say that shared ownership is rubbish - only people who have experienced it know what its like. We bought 40% of a £272,000 shared ownership flat in brentford. Rent has stayed the same and service charge actually dropped. We have now sold it 3 year later for £305,000 meaning we have made £10,000 profit on our 40% share after we have given the housing association their 1% selling fee. We had 5 people view it in the first week and 4 of them wanted it. We were with A2 Dominion.