Buy outright or shared ownership? Dilemma

sarabop

Good evening all,
Im looking for your thoughts, and any advice you might kindly like to impart.
Ive been searching for a house for a few weeks, I do know what I don't want (not a flat etc) and am busy working out what I do want.
This afternoon I viewed a 2 bed, end of terrace, with garage and garden, electric heating, needing a little updating (new kitchen and bathroom wouldn't go amiss) £140k .


This evening I viewed a brand new build, 2 bed, garden, parking space, gas heating, lovely terraced house with sash windows, very pretty. £185k shared ownership (50% at £92500 and rent on the rest)


After doing the maths both properties work out at roughly the same amount per month. However, clearly I will only own half of one of them. To be honest, as lovely as the new house is £185k seems awfully high for a two bed.
So, lovely MSE people, I would love to know what you think, and are there any pitfalls with shared ownership?
Thanks in advance

blahblahblah85

I have a friend that just bought a new build for 200k so 185k doesn't sound that bad! Where in the UK are you?

I would do a pros and cons list, but usually you should get a gut feeling over which property you'd prefer to live in. Personally through the process of looking at various houses I realised I couldn't face living a new estate where it looks like a filmset. The only thing that really draws me to a new build is the energy efficiency!

dimbo61

Horses for courses.
The modern property might have smaller rooms, smaller garden, lower ceilings etc
The older property might need £25/30,000 spending to bring up to modern standards.
Doing up the old place might add more value than new build.
I live in a modern house with good double glazing, heating, security, low maintainence.
Do you want to make money and refurbish the old property or enjoy a new build

Thrugelmir

Rent is rent. Better to own outright.

booksurr

sarabop wrote: »

So, lovely MSE people, I would love to know what you think, and are there any pitfalls with shared ownership?

yes - and you have already spotted the main one - they tend to be over valued because the partner controls the selling price, not you, and so they tend to be difficult to sell

the rate of inflation on the rental element is also at the mercy of the partner - if a registered social landlord the rent may go up on a reasonable formula (eg RPI + ?) if not it could go up by anything and you have no option but to pay the increase or be repossessed for rent arrears even if you have no mortgage arrears

PasturesNew

Buying a place outright is always preferable to any shared ownership offer, when the two properties are comparable, which yours are.

Shared ownership becomes a pain when you try to sell it. There are often hidden "nasties" in the tiny print that'll trip you up. e.g. only being allowed to sell to people who live within the parish or who have a family connection; only being able to sell to people who earn more/less than £X; having to offer it for sale first through the organisation; having to have it valued by the organisation and not challenge their valuation; inability to choose your own price/agent to sell it.

Lots of tiny trip ups meaning that when you come to sell you'll suddenly find you're stuck.

100% is always worth 110% when compared to a 50%.

sarabop

Thanks very much all for your replies. Many of which made absolute sense and confirmed some of what I was thinking last night.
Indeed I have had to fit certain criteria to be able to purchase (live here in Bedford and work here) I spoke to the agent about price and he infirmed me that all the houses were valued by RIC (Rural Institute of Surveyors) which I think was supposed to reassure me.
Interestingly I today saw another similar new build in the same area under the 'Help to Buy' scheme...im off to investigate!
Thanks again to all that contributed

seven-day-weekend

A whole place rather than half a place? No contest!

booksurr

if you ever come back to this thread in a fine bit of coincidence look at this post 24 hours after your one:
https://forums.moneysavingexpert.com/discussion/5050202

he can't sell because the housing association 50% owner has over valued it!!!!!

BitterAndTwisted

Brand new properties, whether shared-ownership or bought outright carry a large premium. It will drop in value the very day you first put the key in the door as no-one in their right mind would pay the same amount for a second-hand property.

Shared-ownership is a con. The rent will soar, the service-charges will soar.

Freehold is always better than leasehold in any case.

Your choice is a no-brainer.

tallybee

The replies are spot on. Shared ownership is full of trips and traps. Don't touch it!