Share to buy schemes

Jojo_fry

And I'm sorry, but you didn't start out by sincerely offering your advice, you started out by pointing out that I was mistaken and left it at that. Had you then gone on to talk about shared ownership and mortgages that would have been enormously helpful in answering my query.

kingstreet

You are the OP, the Original Poster.

I took your point about "wise investment" to mean you wanted someone to tell you if you would make/not lose money from this.

That is something on which I can't give an opinion.

What would you like to know about shared ownership mortgage products?

Jojo_fry

I wanted some general thoughts from someone in the know; how does it work, with eligibility etc? Is it a good idea? How much do you need for a deposit? Which banks are best for these kinds of mortgages?

Jojo_fry

Basically, I live in London, I am single, I earn just over 40k, I have a lump sum of 30k. Do you think this sort of thing is a good option? Renting is ludicrously expensive, will this be any cheaper?

kingstreet

You purchase a portion of a property, based on affordability as set out by the HCA Shared Ownership calculator.

It is usually between 25% and 75%.

You pay rent to a Housing Association/Registered Social Landlord usually 2.75% of the value of the unowned share and as the property has to be leasehold, you'll also have ground rent & service charges (GRSC) to pay.

The SO rent and GRSC have to be entered into your chosen lender's affordability calculator and you would need to take the lowest output of the two to determine the amount you can borrow/buy for.

For example, if the SO calculator says you can buy 50% for £100,000 but your lender's calculator indicates you can't borrow enough to do that, you would need to follow the lender's affordability, not the HCA's.

You have to be vetted by the local HTB Agent, which will tell you the kind of property you can purchase and the recommended share. Then you can head for the Housing Associations to see what they have to offer.

You can buy the share of a current part-owner occupier, what's known as a resale, or a newbuild. If buying the latter, you need to be aware that lender newbuild loan to values will be lower, Halifax will lend only 80%, Nationwide 85% etc so you may need to work with an independent broker to find a lender which will offer you the amount and loan to value you need.

At this time, no-one here can say of the mortgage, rent and ground rent & service charges will be affordable, or better value than the rent you are currently paying.

kingstreet

More here for London SO options;-

https://www.sharetobuy.com/firststeps/youroptions/shared-ownership

and guide;-

https://www.sharetobuy.com/firststeps/information/shared-ownership-buyers-guide

Share To Buy is a regulated mortgage broker, so ensure you understand when they are giving regulated mortgage advice and not providing information on affordable housing schemes.

Possible fee, £549;-

https://www.sharetobuy.com/files/IDD_S2B_MMR2014%20edited%20230414.pdf

Jojo_fry

Right ok, thanks.

I'm sure that it would be better value than paying £1343 purely in rent every month on a 1 bed flat!