Shared ownership query

jessielicious

My boyfriend and I are considering buying a shared ownership property but I have one concern. The price has already been set, presumably the average of several valuations. You have to put your name down and the housing association then assess everyone on their merits and decide who gets the house. If we are chosen, we would then buy a percentage of the property at the price shown, which gives no opportunity for putting in offers. Does this seem like a rip-off, given that on the open market we could stand to buy the place slightly cheaper? Also, how do I know the valuation is accurate? Does anyone have any inside knowledge on shared ownership schemes, or experience themselves?

T4i

*Bump*

Someone must know the ins and outs to this part-ownership. My partner has seen a nice house near us for sale on part owndership but I don't have a clue!!

What does it all mean? Is it safe? Is it plain crazy to do it?

please...

jjuggle

When selling a shared ownership property the price is decided by an independant valuation done by a member of RICS, then the price is fixed at whatever that is. In my experience the valuation is usully slightly lower than market value.
I'm selling the 60% share of my house at the moment and stand to make 50k clear profit - not a bad return for 3 years. Luckily we bought in an up and coming area so it's paid off. We did debate whether to buy the remaining share but decided against it as we want to move to another area. If we did want to buy the rest, we would get a discount for any improvements made. We've done it twice and are now able to afford a mortgage on a whole house. The first time was a 25% share on a 1 bed flat in London, currently we've got a 60% share on a 3 bed house in Bristol which we are trying to sell. We are at a slight disadvantage because house prices have risen so much in our area and also because our share is quite large means it isn't as affordable as it was.
I would recommend it if you need to get on the property ladder and can't afford to buy outright - it's definitely better than renting.
Hope this helps.
J

Anya

I agree with jjuggle. For us it was our only way of getting on the property ladder. We got a mortgage for our 50% share and then we pay rent on the rest until we can afford to buy more (ususally in 25% increments). They will only let you buy if you cannot afford a full mortgage. It has worked well for us as ours has now doubled in value over the last 5 years.

What does it all mean? Is it safe? Is it plain crazy to do it?

Not at all crazy!!! The rent is kept fairly low to make it more affordable and like jjuggle said, they knock off the added value of improvements you have made so that when you come to buy more, you're not paying again for the work you've done.