What are your Experiences of Shared Ownership

Inthepicture

Hi, i'm currently seriously considering Shared Ownership mortgage as my only way of getting out of renting privately. Would you recommend it? I would like to hear of some good experiences of it? I've found bad press, but no good press. The aspects which bother me are:
1. no support from Housing Association while i live there, as 100% of any repairs and maintenance need to be paid by me, even though i would be renting 60%!
2. service charge rocketing, and covering little
3. how long it would take to resell down the line if I wish to, the pool of potential buyers is smaller.....
4. do each Housing Assoc have to stick to a max rental charge of 3% market value? I've seen resales advertised on 3.8% rentals.
5. does anyone make money on resale, will it actually help towards buying somewhere outright down the line, or will it be an expensive money pit? I've read the Housing Association markets resales (sometimes inefficiently) and as the Housing association sets the resale value too, it may not be possible to get full market value on resale. I'm hoping this is an exaggerated negativity and i want to hear the balanced view.


I'm very grateful for people's experiences,
thanks

Dunstable_hoop

1st post, thought id try and help.


My ex-partner and I bought 30% share of a 2 bed new build in Bedfordshire. Full purchase rice £160k. After recent separation we have just sold it 4 years after for £200k. In the meantime we paid approx. £500pm in mortgage and rent combined to live in a lovely property, in a lovely area that we would never have been able to do on rental. We also shared a very decent equity payout considering we did not own much of the property


1. Admittedly this is true and the property type, age and state will be a factor. We were extremely fortunate and had no major issues in our time except for standard maintenance. It is essentially the same as home ownership in this case.


2. Service charge was incorporated within our rent, which increased at around 4-5% per year. Not ideal but was supplemented by our mortgage payments reducing at the end of our initial 3 year deal.


3. Due to the desirability of our area and type/condition of the property, I listed it on the HA website on the Wednesday, had 6 viewings Saturday and 3 formal offers on the Monday. Bear in mind that you won't have a say in the sale price, it will be set by the HA based on independent valuation. Ours was very fair though.


4. Sorry I don't know the answer on that one!


5. Covered that above, we made a really decent amount and yes they do set the value but they ideally want to sell as high as possible too as they get a 1% cut.


I had a lot of negative advice prior to purchase and I have to state that my cousins had a bad experience, but that was with a one bedroom flat that was hard to sell. My advice is that if you are going SO in a fairly desirable property it could be the best move you could make but do be careful if its not!


Hope that helped.

Inthepicture

Hi
yes thank you that is helpful, the negative things I read was spoiling it a bit for me, as it got me worried! I live in Berkshire and the prices are high, so I didn't want to get in over my head. That is a success story and confirms my thoughts on how SO could work well....
I've been thinking that if I choose carefully - good location, parking space, and a fairly new build, then I should be able to enjoy living there, sell reasonably quickly when the time is right, and not have lots of maintenance issues which may arise with an old building.

helphelphelphelp

I bought a SO property in MK in 2010 for £72,00 (that was my 40% share of the house). Sold in 2014 for £84,000. There was also a £15,000 premium on purchase and £18,000 on sale. So I also made money. The house was a 3 bedroom semi and sold no problem. As I had quite a large deposit, my mortgage and rent combined were only £500 pcm, so made it very affordable (£232 was the rent portion). I have no horror stories to tell from my 4 years of being in a SO property and if my circumstances changed I wouldnt hesitate going back to the SO schemes they run in Milton Keynes (although I think they should stop allowing the premiums as the whole point of SO is to help people get on the property ladder, and the premiums price many people out of the market, but thats another story!)

ellesbellesxxx

Hi,
I bought a shared ownership house for 69500 for 50% in 2008. I had a good deposit so my mortgage was 260a month and my rent was 100.
To all intents and purposes it felt like my house... due to my job changing, I put it on market in 2010. I had to get 3 estate agents to value it and they took the average value from those three. I had to market it for a month with the HA - no viewings before it then went to estate agents.
It took me a year to sell and I had to settle for 66000 sale price. The HA then took 300 pounds or so as a commission of that and I had to pay 200 for their solicitors!?
It is a great way to do it if you are in it for the long term and Iwould have taken a lot longerto get onto the ladder by myself but it did end up being a mare to sell - asa 1 bed it really felt like a niche market!

Hoploz

My experience was in 1999 when I bought a 70% share of a standard private flat in Surrey. I staircased and bought the whole flat a few years later. Then I bought a house with my husband and rented it out for a while, eventually selling for almost double the purchase price, so it was fab fr me.

However, this was in the early days. I would not buy a specific shared ownership property, in a big block or estate of housing association homes, due to the restrictions, either prescribed or incidental eg lack of resale potential.

In my case once I staircased to own it 100% it was mine to do with as I pleased, just like any other ordinary owner. And the surroundings were privately owned and cared for.

MoneySaving123

Hi,

I have been in my shared ownership and bought it but if I'd known before what I know now, I would say to everyone considering shared ownership to avoid it at all costs. I have been made to believe since I bought my 30% share that if I ever wanted to sell, I would let the housing association know and they would tell me whether they want to buy my share back. Back in November, I told them that I wanted to sell and they wrote back saying that they would be willing to buy my share. However, what they failed to tell me is that they will buy my share at significantly lower than the market value. It has been valued higher than what I paid for it, yet they will not offer the full market value for my share and instead have offered me £8,000 below the market value price. They have always led me to believe from the start that they would buy the property back at market value not a random figure that they pluck out of thin air. If I sell it on the open market I have to sell it exactly at the market value price. Over the market value they get to keep any profit and under the market value I have to pay them the difference! None of this was explained to me when I bought it which it certainly should have been and they have basically said if I don't like it then refuse to accept the offer, but that's not the point. My solicitor has read the lease and they interpreted it to mean that they have to offer market value upon the sale of my share, so I'm at a loss really to know where to go from here. If I were you, I would avoid it at all costs, I can either accept their paltry offer and lose £8,000 or put it on the open market and see if I can sell it which I very much doubt as they are building new shared ownership houses just down the road!

Loopy28

I previously owned a 3 bed shared ownership house for 5 years. I owned 40%.

In 5 years the property value increased by 13k, so I made £5200 on my share, plus my repayments on the mortgage and the original equity I put in, so ended up coming out with about 20k but was enough for me to get that step on to the ladder of full ownership of a bigger house.

The rent on the 60% was really reasonable, from memory it was about £150 on moving in and was about £165 month by the time I moved out. It increased with the rate of inflation but was about £3 per month extra each year.

In terms of resale, it was easier to get interested buyers that other houses because lots of people want to get on the ladder and can't afford to otherwise. The biggest pain in the backside was that they needed to be approved by the HA and also be able to get a mortgage. I had a lot of applicants that would either be approved by the HA but then not be able to get a mortgage or get an AIP but then not be approved by the HA. So that process delayed things until someone was approved but I still think we sold quicker than comparable houses in the area that were not shared ownership.

Yes you do pay 100% of repairs etc. That didn't really bother me to be honest, my rent and mortgage together were so cheap compared to full ownership and general repairs and maintenance costs were very low. The main issues are your boiler and CH, I had a British Gas cover to take care of that, which was worth its weight in gold.

In terms of value at resale, my HA allowed me to choose my own RICs surveyor.
The HA are terrible at reselling the property, mine had one month to find a buyer, which they didn't. I then moved to an EA and got loads of interest. It was to my advantage though because the HA charged 1% commission of the whole property if they found a buyer and I managed to find an EA who charged less than that.

movilogo

I wonder what happens in shared ownership when one party wishes to sell while other party(ies) is/are not willing to do so?

RedRuby_2

MoneySaving123 wrote: »

Hi,

I have been in my shared ownership and bought it but if I'd known before what I know now, I would say to everyone considering shared ownership to avoid it at all costs. I have been made to believe since I bought my 30% share that if I ever wanted to sell, I would let the housing association know and they would tell me whether they want to buy my share back. Back in November, I told them that I wanted to sell and they wrote back saying that they would be willing to buy my share. However, what they failed to tell me is that they will buy my share at significantly lower than the market value. It has been valued higher than what I paid for it, yet they will not offer the full market value for my share and instead have offered me £8,000 below the market value price. They have always led me to believe from the start that they would buy the property back at market value not a random figure that they pluck out of thin air. If I sell it on the open market I have to sell it exactly at the market value price. Over the market value they get to keep any profit and under the market value I have to pay them the difference! None of this was explained to me when I bought it which it certainly should have been and they have basically said if I don't like it then refuse to accept the offer, but that's not the point. My solicitor has read the lease and they interpreted it to mean that they have to offer market value upon the sale of my share, so I'm at a loss really to know where to go from here. If I were you, I would avoid it at all costs, I can either accept their paltry offer and lose £8,000 or put it on the open market and see if I can sell it which I very much doubt as they are building new shared ownership houses just down the road!

Which HA are you with? (you can pm me if you don't want to openly say)

I've been looking into shared ownership and am also led to believe that if you want to sell, the only valuation the HA will accept is the one from their own 'independent' surveyors or market value but only if you have staircased and own 100%