Buyers Who Will NEVER Own Their Homes

Loughton_Monkey

Graham_Devon wrote: »

.....
People often compare shared ownership to full ownership.....

That's true. People often compare the two.

Graham_Devon wrote: »

.....Not as good as owning 100%, obviously.

... and you've just added to it.

I find that discussions on house prices, these days, are becoming rather tedious.

Prices go up. Prices come down. In real terms and in relation to incomes. They always have. They always will.

As anyone who has owned a house for 30/40 years will tell you, the price actually paid on day 1 turns out to be academic. In my case, I paid £7,200. OK, if prices (in the early 70's) had not been rising 20%+ a year, I "might" have got onto the ladder at £6,500 or something. Wow! £700 saving.

People with any sense will (a) moan about HPI, just like I did in 1973, but recognise that interest rates are tenable at the moment (unlike in 1973), (b) simply get going and buy whatever house they can buy in an area they can afford, and look to move on when and if they can afford to do so.

Those people will, after 30 years, look back and wonder what the hell the fuss was all about.

I blame the Internet and forums like this. There's too much information. I was stupid. When I started work, I bought a house and started a pension. Silly me! I should have waited and waited and waited until prices were 'affordable' and stocks & shares were not 'overpriced'..... As a consequence, I would still, today, be poor, renting, worried about no pension, and using the local foodbanks. I am grateful for my own 'stupidity'!

Jack_Johnson_the_acorn

Loughton_Monkey wrote: »

That's true. People often compare the two.



... and you've just added to it.

I find that discussions on house prices, these days, are becoming rather tedious.

Prices go up. Prices come down. In real terms and in relation to incomes. They always have. They always will.

As anyone who has owned a house for 30/40 years will tell you, the price actually paid on day 1 turns out to be academic. In my case, I paid £7,200. OK, if prices (in the early 70's) had not been rising 20%+ a year, I "might" have got onto the ladder at £6,500 or something. Wow! £700 saving.

People with any sense will (a) moan about HPI, just like I did in 1973, but recognise that interest rates are tenable at the moment (unlike in 1973), (b) simply get going and buy whatever house they can buy in an area they can afford, and look to move on when and if they can afford to do so.

Those people will, after 30 years, look back and wonder what the hell the fuss was all about.

I blame the Internet and forums like this. There's too much information. I was stupid. When I started work, I bought a house and started a pension. Silly me! I should have waited and waited and waited until prices were 'affordable' and stocks & shares were not 'overpriced'..... As a consequence, I would still, today, be poor, renting, worried about no pension, and using the local foodbanks. I am grateful for my own 'stupidity'!

I'm going to start a "justgiving" page for you. Hope you are able to turn it around someday :j

Running_Horse

This one shows what can go wrong...£115,000 for a 30% share.

http://www.rightmove.co.uk/property-for-sale/property-32125902.html?premiumA=true

Two children living in a cramped third floor flat (no lift?) with filing cabinet and cot in the main bedroom. Maybe they can trade up to a SO house?

Would terraced houses really have used much more land? There are excellent bus and rail links nearby.

MoonJelly

I am actually considering SO. I don't see any other way of coming close to owning a place. Yes, I know the association owns most of it but renting for ever means giving 100% of my money to someone else -so my real options are limited.

wotsthat

MoonJelly wrote: »

I am actually considering SO. I don't see any other way of coming close to owning a place. Yes, I know the association owns most of it but renting for ever means giving 100% of my money to someone else -so my real options are limited.

Is shared ownership better than renting though?

What about buying all of a cheaper house?

Graham_Devon

wotsthat wrote: »

Is shared ownership better than renting though?

What about buying all of a cheaper house?

As most shared ownership places are starter 1-2 bed homes or small 3 bed homes, how would you suggest that the poster goes about finding this cheaper house?

Downgrade to a garage?

forgotmyname

Going back some 25 years the plans and details of a shared ownership estate passed through my hands.

I had plenty of time to think about the figures. It worked out more expensive to part buy than getting a mortgage for the full value.

Mortgage + rent + service charge exceeded the cost of a mortgage for the full price.

But as mentioned if you cannot get a mortgage for the full value can you really afford it? Lots were reposessed.

wotsthat

Graham_Devon wrote: »

As most shared ownership places are starter 1-2 bed homes or small 3 bed homes, how would you suggest that the poster goes about finding this cheaper house?

Downgrade to a garage?

Rightmove? You've commented on the £120k 2 bed flat that only gives 30% ownership. Within 20 miles of Cambridge there are plenty of houses for £120k - some look quite nice. The only reason to buy the flat on SO is some sort of misguided snobbishness.

What was your experience? Was there nothing you could afford to buy 100% of or nothing you wanted to buy 100% of?

My view is that SO is a bit of a trap. It initially gets you a nicer house than you can afford to buy but the occupant is much less likely to get out of what you deem to be only starter home.

System

Lots of "owners" will never own their own home. For most of their working lives they will be in debt to the mortgage company, and they may be forced to remortgage into retirement if they can at all. Finally the locked-in value of the house may be needed for old-age care, or just to support living.

mayonnaise

wotsthat wrote: »

My view is that SO is a bit of a trap. It initially gets you a nicer house than you can afford to buy but the occupant is much less likely to get out of what you deem to be only starter home.

It absolutely is.
Shared ownership is by definition leasehold. Short term leases - 99 years - are the norm.
Now that wouldn't be an issue if there was a statutory extension right - but there isn't.

Housing Associations are considered to be exempt from the provisions of the Leasehold and Urban Development Act 1993 as amended by the Leasehold and Commonhold Reform Act 2002 and as such can’t be forced by a lessee to give a lease extension and a shared owner has no right to claim a lease extension under the current statute.

http://www.newsontheblock.com/buying-your-freehold/60617/the-problem-with-shared-ownershipleases.thtml

So the part you 'own' is in fact a short term lease which will be running into marriage value issues pretty soon with no clear extension path.

I pity those stuck in this scheme.