Shared Ownership - 2 Questions

CakeTime

Hey!

2 questions:

• Can I rent out the second room of a shared ownership house/flat?
• Can you give me any feedback on my thoughts below? Good idea, bad idea, etc.

My situation is as follows::

• Salary of £26,500
• Debt free
• Approx £8,000 in savings
• Single
• No Children
• Living with parents, paying next to nothing in rent.

It seems the best time to start to looking getting on the property ladder.

The downside is I'm in Reading and I don't wish to relocate outside of Reading because of my work however the costs are astronomical here and I believe they're to go up over the next few years because we're meant to be improving train links to London. My Dad reckons house prices in the area will actually double because of this.

I think Shared Ownership may be the only way to go and I'm eager to get on the property ladder before the prices shoot up much further. With shared-ownership it seems I can get a 2 bed flat for around £500-600 a month (mortgage) plus £200-300 a month (rent to the other owner). So £700-900 a month.

My salary means I get approximately £1,600 net income a month so shared ownership would eat around half of this instantly and then, with tax, my car, bills and food, I'd have pretty much nothing left for quality of living.... I'm actually amazed that people with a lower income than me can afford mortgages although I guess most are in relationships so they split the cost. #foreveralone

To me it seems the most logical option would be to share ownership anyway but rent the second room out to a friend at a negotiable price. That way, if he's paying say, £400 a month to me in rent and going half on the bills, I am then only spending £400/500 a month on rent and mortgage fees - suddenly it's not that different to renting,

I can't find anything that says whether renting a room to someone is allowed - All the things seems to say I can't sub-let the entire property out which is not what I'd want to do.

If you have any thoughts or suggestions on my situation please let me know. I have no idea what I'm doing! :rotfl:

Thanks for all your help!

Dragonek80

Hi,
As you said you can not sublet the entire property. You can always let your spare room out (have a lodger). The fact it is shared ownership does not really matter. Yu can do that even if you are a Council tenant (councils do encourage that actually believe it or not). First £7500 a year you make from your lodger is tax free !
More info on gov.uk - just type in gov and lodger in google.

I think the room you are renting out must not have its own keys and should be open all the time (it should not be self contained) .

Good luck

exiled_red

I believe that you can take in a lodger in these circumstances. But it sounds like the affordability criteria of the mortgage might be a problem, I imagine that they would need to make sure that you could afford the repayment if you didn't have a lodger and from your numbers above it sounds like it would be tight for you. I would investigate how you fit to the mortgage criteria to see if this could work.

csgohan4

Don't forget the pitfalls of shared ownership and it transcends 'it's cheaper than rent'