Shared ownership possibly 'too affordable'

yllop1101

Me and my partner are hoping to use the shared ownership scheme to buy. We earn under the household income, although only just (by a couple of thousand).
When enquiring about a property we were told that it may be deemed 'too affordable' for us. Has anyone heard of this? I wasn't aware of any further rules stipulating how affordable it should be, I would have thought that as long as we're under the stated household limit that should be it?

kiridoh

From here:

You can buy a home through shared ownership if:
- your household earns £60,000 a year or less (or £71,000 a year or less in London for a 1 or 2 bedroom property, or £85,000 a year or less in London for a 3 or more bedroom property)
- you’re a first-time buyer (or you used to own a home, but can’t afford to buy one now)
- you rent a council or housing association property

So no, as long as you're below the defined household income, there isn't such a thing as "too affordable".

yllop1101

kiridoh wrote: »

From here:


So no, as long as you're below the defined household income, there isn't such a thing as "too affordable".

Thanks Kiridoh, that info is actually out dated now as the rules have changed since April 2016;

The threshold on maximum household income per application, has been raised from £60,000 to £80,000 (outside of London).
The only priority groups for assistance will now be serving members of the British Armed Forces and those honourably discharged in the last two years (or those who are the surviving partners of regular service personnel who have died in service and have applied within two years of the bereavement). Click here for further details.
There are no longer any restrictions which prevent existing shared owners from applying for and moving into another Shared Ownership property.
Applicants for Shared Ownership are now free to purchase a home with no restrictions on the number of bedrooms allowed.


I'm well read in the rules of it which are explicitly stated, I just wanted sure if this 'too affordable' thing is an unwritten rule that anyone else has experienced.

baz8790

So the goverment thinks a household earning £79k should be entitled to help buying a property?

And they also think £15k is a living wage.

PasturesNew

baz8790 wrote: »

So the goverment thinks a household earning £79k should be entitled to help buying a property?

And they also think £15k is a living wage.

Yes. Living wage .... but not living there.

csgohan4

baz8790 wrote: »

So the goverment thinks a household earning £79k should be entitled to help buying a property?

And they also think £15k is a living wage.

Bare in mind those using the scheme will pay back potentially more as they will back the loan at the current house value not when it was taken out.

Elfbert

yllop1101 wrote: »

Me and my partner are hoping to use the shared ownership scheme to buy. We earn under the household income, although only just (by a couple of thousand).
When enquiring about a property we were told that it may be deemed 'too affordable' for us. Has anyone heard of this? I wasn't aware of any further rules stipulating how affordable it should be, I would have thought that as long as we're under the stated household limit that should be it?

I've read various things about some Housing Associations wanting people to 'max out' their mortgage potential - or at least, not be cash-buyers for SO properties, you have to have some sort of mortgage. However, I don't know anyone who has ever fallen foul of this stipulation, or even if it's a general thing or something very specific to certain HAs.

So in short, yes, I've heard of it, but don't know anything about how they work it out, beyond not liking cash buyers.

yllop1101

Ah, so for anyone interested, I found a document online (on the Homes and Communities Agency website) that says that applicants must spend between 25% and 45% of their net wage on 'home ownership', which includes rent, mortgage and service charges. So as a household, who for example earns £4000 per month, they must be paging between £1000 and £1800. Anything below the lower figure is 'too affordable', and above this is unaffordable.

MARTYM8`

baz8790 wrote: »

So the goverment thinks a household earning £79k should be entitled to help buying a property?

And they also think £15k is a living wage.

In London the threshold is £90,000.

But when one bed new builds even in less desirable parts of zones 2 are being sold for £600,000 you can see why!

Try this 2 bed flat on the Hackney/Islington borders - a 30% share will cost you nearly £2,500 a month (including £1,232 in 'subsidised rent').

Insane - but that's affordable housing now. Its not for the poor but the well off - who on similar salaries 15 years ago could have bought a house outright in Islington rather than 30% of a flat!



https://www.sharetobuy.com/firststeps/sharedownershippropertydetails?id=19615

alfiehoney85

Hello

This happened to us. We were accepted by the Orbit as we currently earn under the £60. We applied in Feb time.
At this stage we were only able to bid on 2 bed due to bedroom restrictions.
within a few weeks we had a call to say a newbuild 3 bed had become available. so we went to view (and we are now mid proces of buying)
We went to the house to go through the reservation and affordability calcultor with a mortgage broker they chose to access.

Basically, they input all our financials, then they told us how much % we had to buy based on affordability. We were at the top end with 75%. We initially only wanted 50% as thought would be lower mortgage payments etc (we are obviously happy to have 75% share)
The rep from the housing association started getting pushy with us. When we were questioning the %, she used the saying, i can speak to my manager but according to our affordability calculator on you, you can afford this and potentially you are "too affordable" so its up to you if you want to go down that route.
She showed us the calculator and the bandings for the % share and on paper she looked right, but we couldnt afford the similar house in the area 100%.
We agreed with the 75% and now purchasing. I did feel she was being pushy with us, by scarmongering with that phrase.
What i will say, it just be 100% honest with your expenditure. This will only get highlighted at a later stage if you dont.

VeryMan

What is subsidised rent? If you buy a shared ownership, you can get help to pay the rent?