Shared ownership con. Young lashed to the yoke and regretting every second

Prothet_of_Doom

You take a house worth £100K, which cost you £60K to build, tell everyone it's worth £140K, sell 50% for £70K and charge rent on the 'other half'

If house prices go up, and the first owner wants to buy the other 50% you now charge him £80K to buy that half.

But in the short term the house price drops, so, it is probable that the FTB is now in negative equity, because his £70 investment was only ever worth £50K. If he tries to buy the other 50% at the new lower value, you'll tell him to "do one"

And yes you can buy a nice terrace with the freehold, which actually has bigger rooms, in the same area for £70K.

So like all snake oil salesmen, you need someone who is aspirational and wants a drive and a bit of grass, and doesn't think it through.

Cornucopia

Prothet_of_Doom wrote: »

You take a house worth £100K, which cost you £60K to build, tell everyone it's worth £140K, sell 50% for £70K and charge rent on the 'other half'

...

And yes you can buy a nice terrace with the freehold, which actually has bigger rooms, in the same area for £70K.

So why don't people buy those £70k houses instead of the new builds?

It's a bit insulting, really, suggesting that young people are more likely to fall for a bit of marketing hype.

wotsthat

Cornucopia wrote: »

So why don't people buy those £70k houses instead of the new builds?

Vanity. Shared ownership salespeople prey on the gullible convincing them they can have the house they deserve for the same price as the house they can really afford.

I'm sure most people's calculations don't project further than month one so it's an easy sell.

Cornucopia

wotsthat wrote: »

Vanity.

So a flaw in the buyers?

wotsthat

Cornucopia wrote: »

So a flaw in the buyers?

Yes but one that's being cynically exploited.

Cornucopia

wotsthat wrote: »

Yes but one that's being cynically exploited.

Is it though?

wotsthat

Cornucopia wrote: »

Is it though?

Yes, they're being sold short term gain and long term pain. The opposite to buying a whole house.

The exploitation will continue as the vultures circle. All of the costs outside their immediate control will come in higher than (they) expected and increase more rapidly than (they) expected.

They couldn't make a better job of identifying themselves as mug punters other than starting a direct debit for £2/ month to save snow leopards.

Cornucopia

wotsthat wrote: »

Yes, they're being sold short term gain and long term pain. The opposite to buying a whole house.

So you're saying buying is preferable to renting. Interesting. :money:

They couldn't make a better job of identifying themselves as mug punters other than starting a direct debit for £2/ month to save snow leopards.

Save the snow leopards!

Prothet_of_Doom

Cornucopia wrote: »

So why don't people buy those £70k houses instead of the new builds?

It's a bit insulting, really, suggesting that young people are more likely to fall for a bit of marketing hype.

Not insulting, really. I used to be young, I have children and nephews and nieces who are young adults. I listen to them.

I give you the Iphone 2/3/4/5/and 6 on a contract.
I give you the BMW 1 series on easy finance.
I give you a package holiday to the sun.
I give you Fur Coat and no erm knickers (to coin my gran's turn of phrase)

But can you blame them ? So many factors. No survey, no deposit, no need for DIY, a garden, a place to park the car, a guarantee, built in kitchen appliances, instant zero stress gratification that satisfies their believe in thier own entitlement. and a bit of snobbery.
But above all NOT enough research. Not enough financial education.

remorseless

Prothet_of_Doom wrote: »

Not insulting, really. I used to be young, I have children and nephews and nieces who are young adults. I listen to them.

I give you the Iphone 2/3/4/5/and 6 on a contract.
I give you the BMW 1 series on easy finance.
I give you a package holiday to the sun.
I give you Fur Coat and no erm knickers (to coin my gran's turn of phrase)

But can you blame them ? So many factors. No survey, no deposit, no need for DIY, a garden, a place to park the car, a guarantee, built in kitchen appliances, instant zero stress gratification that satisfies their believe in thier own entitlement. and a bit of snobbery.
But above all NOT enough research. Not enough financial education.

hmmm I know that this may sound absurd (the shared ownership that is) but what is the 'traditional house ownership' model is changing and they're onto something?
So much pressure on this house ownership, prices out of control, what is this rat race for? :A