Should I? - Shared Ownership?

Reece_Smillie

Hi,


I wanted an opinion on what I am about to do:.


A new neighbourhood has been recently built, in the last few months, and Wakefield District Housing offer a "shared ownership" scheme where they aim to have first buyers to buy from 50% to 75% of a house. £61,000 for 50%
The other percentage Wakefield Council would own.


Me and my friend would like to get a mortgage to own so much of the house, depending on how much the bank will lend us, is how much we share we will buy. E.g. if they offer us more than £61,000, we will buy more share.


This is because I am on a 0 hour contract working at McDonalds as a Manager, so I'd never be able to get a mortgage for a full house by myself.


I am a first time buyer, I have over £7,000 enough for a deposit, should only be about 4k, which is 2k each.


The house is new, and is cheap, it might be a good investment, what do you guys think?

Reece_Smillie

I'm also 19 years old, and I have a credit score of "Average", or "Good"

SmlSave

I think shared ownership is a good idea if you're expecting your income to increase/a windfall to appear so that you can move or get 100% later on.

Just my opinion though.

Do be aware of all the extra costs. Service charge/ground rent/notice free/management pack if you sell etc

AnotherJoe

Make sure you and your friend create an agreement which clearly states the ground rules. For example suppose one of you gets hooked up with someone and wants to (a) move them in or (b) move out and sell up. Or if you fall out and want to sell. Or if one becomes unemployed and can't afford the rent. Etc. Agree what you'd do in each case and each signs it.

gaz141

"This is because I am on a 0 hour contract working at McDonalds as a Manager"

Do McDonalds really employ their staff on Zero hour contracts? I know it's always been looked down on as a McJob, but that's outrageous and appalling if they are doing this and you deserve better.

Kynthia

Shared ownership in my opinion is best for those who need somewhere secure to live in that area long-term, so renting is too insecure for them due to landlords selling and them having to risk moving their children from their school to find somewhere new each time, and are unlikely to be able to afford to buy a non - shared ownership property any time soon.

I believe this because shared ownership is not as good as normal ownership, but for the type of people above its worth it for the security. Shared ownership properties often don't increase in value from the purchase price as much, are complex and slow to sell, generally can't be let, and you are responsible for all of the upkeep and service charges yet you only own a percentage of the property.

You are only 19 and things could change for you a lot over the next few years. Are you sure you want to be tied to a property and a large debt now, particularly with someone you aren't even trying to build a life with but a friend who may end up wanting different things from you, who may meet someone and move them in or want to move away?

Newbiebuyer2016

I wouldn't say it the best imvestment.

In theory you could put down a £3k deposit (5%) the fees are around £2.5k.

Have you got proof of a steady income from your 0 hours contract? How much does your friend earn?