FTB Shared Ownership Property

JackRouge

Hello,

My girlfriend and I are currently considering a property that's available on shared ownership with a stake of 55% for 66k. We currently have around 25k in total.

My initial thinking was to save to around 37/38k and look for a house around 130-140k, with a deposit of 30k, up to 2k in fees, a couple of grand each to keep in savings ("rainy day fund") and then obviously furniture etc on top.

Recently, two houses (actually on the street I currently live) have gone up for sale available with 55% shared ownership and we're interested but wondering whether it's particularly viable etc. We're planning to go see a broker for advice soon. Having tried the Experian free trial recently, my credit rating is average, they recommended taking out a phone contract to get a bit more on it when I phoned to cancel. We've not checked my girlfriend's yet and obviously will soon, but I expect it to be similar.

I'm thinking of a deposit of about 18k on this?

Basically I'm just wondering people's opinions and whether it's worthwhile etc. As I say, we've contacted a broker to discuss in person too.

Thanks for any advice.

jonas123

hard to say without more info. Shared ownership can be useful, and can be also be tricky depending on the situation. If you can afford to buy out right, I would say that 99% of the time that is the better option.

It's hard to say though without knowing your future plans, and also the terms in the lease of the shared ownership property. You might want to look into shared ownership in more detail regarding what happens if you want to staircase / sell in the future as there may be some undesirable clauses in the lease.

FYI - i've just managed to staircase my SO to 100% so, so far, it has been good to me - I've lived in a nice area for 2 years owning 50%, and now that my income has gone up, I've had the opportunity to buy the rest. I wouldn't have been able to live where i do today without the scheme.

Digitalbob

Hi Jonas123,

I'm in the same boat as the thread starter, can you provide a little more info on your shared ownership journey to 100%?

Was it staright forward, did you run into any problems with the HA or your mortgage provider?

Thanks in advance!

Pear

I am going through a shared ownership process and really advised that you need to do your research on the scheme. If you have the money to buy out right then I would consider that over shared ownership.

The number of morgage packages from banks are restricted and many want a bigger deposit especially if it is a new build so make it even more restricted.

jellyfish76

I have a 35% share in a shared ownership property and after 3 years am in the process of stair-casing to 100%.

This has only been possible by
-35% increase in house prices (I'm in london) thus earning me some equity to allow for further borrowing - this does however mean the share I'm buying has went up 35%
-My income has went up a fair bit in the last 3 years
-I have an additional 10K in savings to put down.

I'm having to borrow 4.5 my income at 80% LTV so it's big step up.

While it has worked in my favour, I still wouldn't recommend SO if you can afford to buy on the open market. You could end up not being able to afford the rest. There are also a hefty chunk of solicitors/ mortgage fees to pay when buying extra shares.

Dealing with the HA is a huge hassle. Service charges are huge and unless you either stay with a very low% owned or own 100% outright then I think it could be hard to sell on. You are also liable for 100% of any repairs.

You also cannot let out SO flats so have much less flexibility.

I'd say proceed with caution. It really was a last resort for me and I was lucky to purchase my share when our flats where reduced in price and there was a FTB stamp duty holiday.

JackRouge

We've been to view the cheaper of the two properties today (the other got taken off the market) and like it. We're now thinking of going for the whole 100% going off people's recommendations and it being affordable, not least with the wider range of products available.

The only thing now is I'm stuck whether to actually go on with the broker I spoke with or whether to just save on the fee. I've seen a few deals with Yorkshire Building Society that seem good so I'm wondering whether to just apply direct or whether there are real benefits of using a broker?

jonas123

Digitalbob wrote: »

Hi Jonas123,

I'm in the same boat as the thread starter, can you provide a little more info on your shared ownership journey to 100%?

Was it staright forward, did you run into any problems with the HA or your mortgage provider?

Thanks in advance!

Hi - the process itself was quite simple. My SO property had a lease from 1999 when there weren't so many restrictions I believe (some of the newer leases have clauses in them that are restrictive even after 100% staircasing).

Housing association were actually fine, they don't really need to do that much, just instruct a valuer and tell their solicitors to get working. My main problem was with the bank, but only because hsbc were useless, nothing to do with the fact it was SO.

My only concern and it still is a concern is that the valuation is the price you pay. Mine had gone up 20% since I bought the property in 2012! As not many properties have sold down my road recently, and definitely no comparable ones, I have no idea what the true value of the property is. However I'm glad I did it as it now means I don't have to worry too much about difficulties when selling and I can rent it out in the future if I choose to.

chanz4

YBS are a pain will warn you