Shared Ownership, is it possible for people like us?

SamL44

Hi,
We have been lucky enough to be left £40,000 in a will and as we are in rented accommodation and wish better security so, we have looked at Shared Ownership.

What I want to know is are we eligible (or allowed) to put down the £40,000 as our share and just pay the rent on the rest.
Due to the down turn in the economy 6/7 yrs ago, my husband got layed off and we lost our home, so we have a house possession on record, plus poor credit history.
At the moment our rent is a lot more than what it could be under this scheme.

But would they even consider us?

Any help gratefully received.

libf

Depends on the housing association involved. Find a property that you would be interested in and then inquire about the scheme's rules. (Also keep in mind that shared ownership properties are in high demand and hard to access.)

AdrianC

You'd be a cash buyer for the £40k equity. What %age that worked out to would, of course, be down to the full value of the property. Oh, and your £40k nest egg would need to pay for all the purchase fees, too.

You say your rent would be "a lot more" - well, yes - because you're renting 100%, instead of owning (say) 25% and renting 75%.

One thing to think about... If your household income is low, can you afford the property maintenance that would become your responsibility under shared ownership?

SamL44

Yes, we would need to make sure we had enough for the fees as well. Thanks for that must remember to check those fee amounts out.
Looking at the rent amounts we would have to pay each month we would be able to afford to pay any maintenance charge as well.
Plus in the near future I hope to be able to be myself a little part time job to help out with bills etc.

Willem-de-Blois

I have found that the cost of the rent on the RSL's share of the property plus service charges plus sinking funds means that the total monthly repayments to freeholder/ landlord and to the bank would be unaffordable and that I'd be better off renting 100% where I am or buying a freehold 100%.

libf

Willem-de-Blois wrote: »

I have found that the cost of the rent on the RSL's share of the property plus service charges plus sinking funds means that the total monthly repayments to freeholder/ landlord and to the bank would be unaffordable and that I'd be better off renting 100% where I am or buying a freehold 100%.

Very much depends on the area. I definitely could not rent a 1 bed flat by myself in Oxford for the cost of rent and mortgage on my shared ownership flat. In fact, it would be about 2.5x what I pay.

SamL44

I'm looking to pay my percentage with a cash sum, so I would have no mortgage (not that we could hurt one anyway). Just the rent to pay.
My husband is looking for jobs in other parts of the country, as I'm in Dorset and my £40,000 wouldn't get me anywhere here. Just renting here, it's hard to find anything under £900 per month.

Willem-de-Blois

libf wrote: »

Very much depends on the area. I definitely could not rent a 1 bed flat by myself in Oxford for the cost of rent and mortgage on my shared ownership flat. In fact, it would be about 2.5x what I pay.

I am in Bath so it is probably the same property market (loads of students and tourists, BTL vipers everywhere and the average property price over 10 times the average salary).


I was unofficially told by a staff member of the local RSL/ HA that people in Bath wanting shared ownership would likely be earning £28k at least.


Also, any block of flats with communal lifts will see the service charge go through the roof.


The whole idea of shared ownership is to pay off the unsold share asap but I would have been in a new rental/service charge + sinking fund trap and would have been unable to save up to purchase the remaining 10% tranches.


The mortgage rate would have been higher too apparently.

AdrianC

SamL44 wrote: »

I'm in Dorset... Just renting here, it's hard to find anything under £900 per month.

Umm, not QUITE true... Rightmove alone shows 57 rentals for <£400/mo, 95 for <£450, 160 for <£500, 330 for <£600, 600 for <£700, nearly 900 for <£800, and over 1,000 for <£900 in Dorset.

SamL44

AdrianC wrote: »

Umm, not QUITE true... Rightmove alone shows 57 rentals for <£400/mo, 95 for <£450, 160 for <£500, 330 for <£600, 600 for <£700, nearly 900 for <£800, and over 1,000 for <£900 in Dorset.

It depends on what you want to live in and the area, my son goes to school in Poulner, Ringwood which is a very expensive area on the edge of the New Forest.

AdrianC

SamL44 wrote: »

It depends on what you want to live in and the area, my son goes to school in Poulner, Ringwood which is a very expensive area on the edge of the New Forest.

That's all very well and good, but you don't have any kind of right to live in an area you can't afford. Children can - and frequently do - change school.