Shared ownership/key worker scheme

ooobedoo

Can somebody explain to me in 'idiots guide' how this works, and how do you buy the house ultimately?

milkydrink

Shared ownership is best AVOIDED IF you can buy without it.

You buy a % of a house (say 50%). You buy half & you rent half from the Housing !!! or whoever is running the scheme.
Say its £100,000. You get a mortgage for £50,000 & pay rent on the other half.
But AFAIK you are responsible for all repairs.
Now your rent will go up each year, as rents do, on the half that is rented.
If in 20 years you have paid off the mortgage & want to buy the other half, you will do so at half the CURRENT market value. That could be anything in 20 years time!!!!
Typically people buy bits as they go & the rent reduces as you buy more & own less.

ooobedoo

so if I had 30k to put down, the price is £170, so we would have pay off mortgage on 40k, put then keep buying more, is this possible?

brazilianwax

kimevans wrote: »

Shared ownership is best AVOIDED IF you can buy without it.

You buy a % of a house (say 50%). You buy half & you rent half from the Housing !!! or whoever is running the scheme.

Not necessarily. I bought my first house on shared ownership - HA put in 30% and I had a mortgage for 70%. I never had to pay the HA anything, and I owned the house (they had a financial charge on the house, but no legal ownership).

I could have bought more if I'd wanted to, but never did. I bought the house for 40k.

8 years later I sold for more than 3 times as much. The HA got 30% of the sale price back, I paid off what was left of the mortgage, and walked away with the rest (more than i had originally bought for)

For me it was a fantastic move.

brazilianwax

ooobedoo wrote: »

so if I had 30k to put down, the price is £170, so we would have pay off mortgage on 40k, put then keep buying more, is this possible?

depends what the HA will offer. Mine only did 70/30. Some do 50/50.

Turnbull2000

I don't quite understand the logic of shared ownership myself. If you can only afford half a property now, how soon do you expect to purchase the other half?

Does the borrower expect do double his/her earning over the coming years to purchase the other 50%? And if this is what lenders have created to help sustain ever increasing house prices, will we soon be down to 25% shares? The whole concept seems quite silly

Why should FTB's accept only part of a home?

brazilianwax

Turnbull2000 wrote: »

I don't quite understand the logic of shared ownership myself. If you can only afford half a property now, how soon do you expect to purchase the other half?

Does the borrower expect do double his/her earning over the coming years to purchase the other 50%? The whole concept seems quite silly

You don't have to buy the other half.

You can make money on the bit you own.

Turnbull2000

brazilianwax wrote: »

You don't have to buy the other half.

You can make money on the bit you own.

Uh huh. So it's a money making exercise is it? Ever thought that perhaps prices won't rise, or that any capital gains will be offset by continuous rental payments?

And of course, if they do indeed make a 'profit' on their 50% share - then chances are all other property values have risen in a similar fashion and the borrowers are no better off.


Your logic is almost as bad as the scheme brazilianwax.

Shared ownership is nothing but a scam that young buyers should not accept.

brazilianwax

Turnbull2000 wrote: »

Uh huh. So it's a money making exercise is it? Ever thought that perhaps prices won't rise, or that any capital gains will be offset by continuous rental payments?

And of course, if they do indeed make a 'profit' on their 50% share - then chances are all other property values have risen in a similar fashion and the borrowers are no better off.


Your logic is almost as bad as the scheme brazilianwax.

Shared ownership is nothing but a scam that young buyers should not accept.

Did you read my first post?

I did it - not to make money - I would have stayed in that house had I not got married - my husband and I sold both our houses to buy one together.

Granted I didn't pay rent, but the HA and I both made money out of the house. No-one lost anything.

Are you getting treatment for your excessive negativity?!

milkydrink

ooobedoo wrote: »

so if I had 30k to put down, the price is £170, so we would have pay off mortgage on 40k, put then keep buying more, is this possible?

The cut can be 30/70, 40/60, 50/50 whatever. You buy your share funded by savings & mortgage & rent the "other" share. The rental will increase annually.
Buying more is possible as you progress through you career & earn more you can buy more.

If you can't buy without it, then its the only way. Buy as much as you possibly can upfront & then buy the rest as quick as you can (they may have some limitations on this).

ooobedoo

At the moment we can only afford stuff that needs loads doing to it, that neither of us have the time or the talent so would need to get people in to do, and that obviously costs.

Hubs is classed as a keyworker, we will be able to afford more in the future when DD is at school.