Share your shared ownership experiences

h007

I have been in my SO flat from Hyde Housing for 4 years now. And as a whole it has been a good experience. I am single, on an average wage and only had a small pot of savings. There is no way i could get a full mortgage.

My flat was a resale but still felt like a new build as it was only a few years old. There were specific criteria for the housing association to consider you. Priority was given to people who already lived or worked in the area and you had to earn under a certain limit. I used a broker and solicitor recomended by the housing association.

My combination of rent, service charge and mortgage on 40% of a 1 bed flat in a decent area comes to roughly £600. The rent and service charge have increased slightly, though in fact last year the rent portion even went down a couple of pounds.

For me it was either this or pay far more in private rent. I am in south east london and house prices are astronomical as are the rents. I guess i could of moved away from the area i grew up in and where my friends and family are to get more house for my money but that would of also meant a longer more expensive commute into central london for work.

i do want to staircase sooner rather than later before the valuation goes even higher! only then will i consider home improvements such as new bathroom otherwise i feel it is not financially worthwhile.

h007

skater_kat wrote: »

but we will now get a nice right to buy discount on our staircasing...??!!

Will we? i wouldnt of thought it applied to SO??

salieri75

Shared ownership is far from perfect but I really think some of the people who are slating it on this thread do not recognise that some of the problems they encounter are not the fault of the shared ownership tenure but just of their local property market.
Eg. Value - if a flat is worth less when you come to sell it this is not due to it being shared ownership - the same flat would likely have devalued if you owned it outright. Property is NOT a guaranteed gain.
Management co's - Battles to get housing associations to fix things are no different to the battles people in leasehold flats have getting their freeholders/managing agents to sort out problems. And almost everyone in a flat will be subject to these challenges and costs. The service charges on a private new build block of flats are horrendous.

My own experience has been satisfactory.
Cost - We bought a 40% share in a 2 bed flat 8 years ago. Immediately the cost was £200 a month cheaper than renting the 1-bed flat we were in. As rents have increased in the area, that difference is now closer to £400. The value of the property has increased and we stand to leave with a reasonable profit.
Repairs - The housing association have been very good about sorting out some problems, useless at others but overall compares favourably with the problems friends have had with freeholds owned by remote management companies.
Size - Our flat is not large but for £/sqm compares favourably with what was available (and utterly unaffordable for us) on the open market when we were looking. Also many flats in Victorian conversions are a good 20% smaller with bedrooms that would struggle to fit more than a bed and 1 other piece of furniture.
Quality - a plumber friend came round once to fix something for us. He told us how good the pipework installation was compared with a lot of work he had seen in other (private) new builds in the area. New builds will always have some teething problems but the snagging period and NHBC guarantee are there to protect you. Private developments might have shinier more expensive looking fixtures but this is meaningless after a couple of years when finishes begin to tarnish.

I don't think you can generalise about shared ownership - as with any property investment its appropriateness will depend on your location. Different housing associations will have different schemes and different ways of operating - some are better than others. I think in London it's the only option for a huge number of people and I'm grateful for the opportunity, affordability and stability it's given to us.

salieri75

fudgey1802 wrote: »

Im 7 years into a 25% shared ownership on a newly built flat and was all fine BUT our company that looks after the building has served us a section 20 notice that the building needs repainting and poss repairs and we got no choice to pay and want to charge us NOW before work is done on an estimated bill.

fudgey1802 - this is no different to what happens in other blocks of flats. Ask anyone who bought an ex-council flat. The councils see these private owners as cash cows and present 5 figure bills for fixing the roof or installing new windows. It's a reality of leaseholder flat-ownership in general, nothing to do specifically with shared ownership.

zappomatic

Shared ownership has worked out really well for me. I took a 35% stake in a 2 bed flat in inner London in 2007. At the time the mortage plus rent and service charge were broadly in line with renting an equivalent place. Today my outgoings are roughly £700 a month while to rent a similar flat in the same development is £1600-£1900. The rooms in the shared ownership portion of the development are actually larger than in the main part, and the spec of the fixtures and fittings is only slightly lower. Rent increases are pegged to inflation so no nasty surprises. As 25% of the value is rent-free there is less of an incentive to staircase beyond this amount. In just over seven years the flat has increased in value by over 80%.

But perhaps I just got lucky by choosing a quality development in the right part of London at the right time...

zappomatic

Ronaldo_Mconaldo wrote: »

So you're half renting and half interest-only mortgage? I'm not surprised you think it's so good as you're not paying off a mortgage. It's all rent for you and you own nothing.

Even if it is all rent, that's still less than half the going rate!

ifan.goch

We took a 50% shared ownership house with our local authority (LA). No problem getting a mortgage with the Nationwide building society, but an absolute nightmare when we came to sell it.

We lived there for about 15 years, and during that time we updated the central heating and converted the loft to an additional bedroom.

When we wanted to sell the LA sent a valuer (which we had to pay for) and told us that was the minimum price we could sell it for. This valuation included the increased value that we had added at our own expense with the improvements to the property. The LA were then entitled to 50% of the sale price with the minimum being 50% of their valuation. We were liable for all the costs associated with the sale incurred by both ourselves and the LA.

So for 15 years the LA had received rent without any responsibility. Then at the time of sale they received 50% of the profit due to our investment in maintaining and improving the property. And all of this at no cost to themselves as we had to pay all of their fees. Talk about having the penny and the bun :mad:

The only good thing about the sale was the fact that the LA were prepared to sell their 50% to the buyer at the same time as we sold our 50%.

honkytonk_2

I have to agree with Getrichslow. I bought a shared ownership flat with A2Dominium as the housing association and they are the most useless organisation I have ever has to deal with. I cannot even begin to describe the nightmare it was dealing with them. Chronically overcharging service charges (turns out they were charging us for the electricity for the entire block as well as another privately owned flat), doing nothing about antisocial neighbours until the police had to get involved, and on and on.

However, it hasn't totally put me off shared ownership and I am looking into doing it again having had to move back to my parents for a bit. I will just be doing a lot more research into the housing association before taking the plunge.

But I cannot iterate this enough - keep away from A2!!

suki1964

ifan.goch wrote: »

We took a 50% shared ownership house with our local authority (LA). No problem getting a mortgage with the Nationwide building society, but an absolute nightmare when we came to sell it.

We lived there for about 15 years, and during that time we updated the central heating and converted the loft to an additional bedroom.

When we wanted to sell the LA sent a valuer (which we had to pay for) and told us that was the minimum price we could sell it for. This valuation included the increased value that we had added at our own expense with the improvements to the property. The LA were then entitled to 50% of the sale price with the minimum being 50% of their valuation. We were liable for all the costs associated with the sale incurred by both ourselves and the LA.

So for 15 years the LA had received rent without any responsibility. Then at the time of sale they received 50% of the profit due to our investment in maintaining and improving the property. And all of this at no cost to themselves as we had to pay all of their fees. Talk about having the penny and the bun :mad:

The only good thing about the sale was the fact that the LA were prepared to sell their 50% to the buyer at the same time as we sold our 50%.

You have forgotten that the HA were paying half your mortgage, the 50% you couldn't afford to buy outright

Beefish

We have been living in a DIYSO property for 16 years and have inherited a chunk of money recently. We are paying more rent on the 50% the housing association owns than we are mortgage. We have just had the house valued with a view to buying out remaining 50% and were quoted the highest price from the 3 properties sold recently in the local area. The price for the house which is identical to ours would have been a fair comparison but to pick a much more expensive and very different house and tell us 50% of this price, rather than 50%of the lower priced but similar house seems a bit odd to me. Can we query the valuation? Live in Leeds by the way.