Co -ownership v buying outright

mallour

Hi Everyone


I need some advice, any help would be appreciated.


I am 35, single with no kids living in Northern Ireland. I want to buy a house, I have £13k in savings and I have picked an area where I want to live.


Option 1 is go Co-ownership on a new build, turn-key, 3 bedroom semi detached house with a detached garage, priced £124,950 As you are only allowed to take a share 3 times your salary on co-ownership my share would come in at 55% ownership meaning a mortgage of approx. £68,000 with approx. £110 rent per month. Based on this, my mortgage and rent will be approx. £400 per month, with £80 rates per month. I would have the option to buy another 5% of the property the day after I move in with my savings bringing my share up to 60% with approx. £10 reduction a month in rent. Or I could buy no further shares ever and just have a 55% stake in the house when I go to sell on. I understand the whole co-ownership process especially the fact that when you buy more shares in co-ownership you pay market value.


Option 2 is a 2 bedroom apartment in the same area. Priced at £79,950 which I reckon I could get for approx. £75,000. I would be able to buy this outright. Mortgage based on paying full price is approx. £358, £307 if I got for £75,000. The management fees are £100 per year and rates approx. £40 per month.


I really like the 3 Bed semi detached and my heart is in it but I want to 100% make the correct financial decision. I'm moving from the city to the suburbs so I would always want a house rather than an apartment. Apartment would be fine if I was staying in the City. But Big money involved so it has to be right.


As the second option is an apartment would I make much more money on it when I go to sell than I would if I sold 55% or 60% share of the house? im not sure.


Any advice would be great, head is melting

Stevie_Palimo

Can you not buy outright against option 1 ? - If not me personally would be looking at elsewhere to buy outright as opposed to co ownership that does you no favours in the long run and should be seen as a very last resort so to speak.

mallour

On a new build the banks are looking between 15% and 20% deposit which is between 19k - 25k plus the monthly repayments would be to high for my salary on any less of a deposit.


What do you think about the apartment?

Stevie_Palimo

Okay well I would look as an apartment as foothold onto the property ladder but would rather if I could wait it out and save up more for the deposit to buy a house but that is preference to me, An apartment will suit some people and as long as you are happy in it then no worries.

tommie

What is it with people and this "property ladder" thing?

A ladder is something that usually goes up - unless you ask the poor souls that jumped on it in 2007.....

hmmmmm.


Help to Buy and Co-Ownership smacks of high risk and a life time of debt investment.

Stevie_Palimo

tommie wrote: »

What is it with people and this "property ladder" thing?

A ladder is something that usually goes up - unless you ask the poor souls that jumped on it in 2007.....

hmmmmm.


Help to Buy and Co-Ownership smacks of high risk and a life time of debt investment.

Is an expression used when making a first time property purchase, Basically you buy a property within your means and gradually upscale to larger houses hence why it is called property ladder.