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Shared Ownership - Success Story
kratosthegreat
Posts: 130 Forumite
I purchased my property on a Shared Ownership scheme about 15 months ago.
When I was researching shared ownership, I came across a lot of horror stories and received advice from people who recommended against it, based on the experiences of their friends/family members.
Some of the risks I saw were people ending up in negative equity and being unable to sell their share. I heard it would be harder to sell because the market is smaller, and that's true.
I also heard lots of negative things about this type of scheme, such as people saying you don't own anything and it's a scam.
But here's the thing... even with a full mortgage - stop paying it and you lose the property in exactly the same way as you do with a shared ownership property. Even with a full mortgage if the property loses value, you end up in negative equity. Investing in property carries similar risks whether it be a full mortgage or shared ownership mortgage.
After 15 months, I decided to sell up. When I got a valuation, my share had increased by £14 000 and I got the asking price within 3 months. It was new build when I bought it too. Add back the payments I have made already and then subtract legal costs and estate agents fees, even an early repayment fee and I'm looking at a Net amount of £15 000. Consider my deposit was about £2500, thats a whopping 600% return on investment in 15 months and is going towards a new full mortgage.
For those considering Shared Ownership, I would say don't be put off by the negativity you read, but consider it closely, like I did to make an informed decision. There are lots of factors to consider such as anticipated growth of prices, the location, features etc. and every property is different. Shared ownership IS a foot on the property ladder. Yes, Staircasing up to 100% would be expensive, as you need a valuation each time you increase your share. The GOLDEN RULE, however, is do you believe your share will increase in value by the time you come to sell it? If the answer is yes and you have good reasons to believe so, then it will always be a good investment.
I remember reading something along the lines of, "you don't actually own anything" with shared ownership schemes. Well, you do, you own a share of a property, similar to owning a share of a business. If that share increases in value, you make a profit. If it doesn't you end up in negative equity.
The fact is, you can get on the property ladder, in a very nice property and make a profit on the property on shared ownership schemes. Getting my foot on the property ladder through a shared ownership scheme has been the best investment of my life at 24. It won't work out the same for everyone. But just like renting has a place in the market and is better for some people and just like full home ownership has a place in the market, Shared Ownership has it's place too.
When I was researching shared ownership, I came across a lot of horror stories and received advice from people who recommended against it, based on the experiences of their friends/family members.
Some of the risks I saw were people ending up in negative equity and being unable to sell their share. I heard it would be harder to sell because the market is smaller, and that's true.
I also heard lots of negative things about this type of scheme, such as people saying you don't own anything and it's a scam.
But here's the thing... even with a full mortgage - stop paying it and you lose the property in exactly the same way as you do with a shared ownership property. Even with a full mortgage if the property loses value, you end up in negative equity. Investing in property carries similar risks whether it be a full mortgage or shared ownership mortgage.
After 15 months, I decided to sell up. When I got a valuation, my share had increased by £14 000 and I got the asking price within 3 months. It was new build when I bought it too. Add back the payments I have made already and then subtract legal costs and estate agents fees, even an early repayment fee and I'm looking at a Net amount of £15 000. Consider my deposit was about £2500, thats a whopping 600% return on investment in 15 months and is going towards a new full mortgage.
For those considering Shared Ownership, I would say don't be put off by the negativity you read, but consider it closely, like I did to make an informed decision. There are lots of factors to consider such as anticipated growth of prices, the location, features etc. and every property is different. Shared ownership IS a foot on the property ladder. Yes, Staircasing up to 100% would be expensive, as you need a valuation each time you increase your share. The GOLDEN RULE, however, is do you believe your share will increase in value by the time you come to sell it? If the answer is yes and you have good reasons to believe so, then it will always be a good investment.
I remember reading something along the lines of, "you don't actually own anything" with shared ownership schemes. Well, you do, you own a share of a property, similar to owning a share of a business. If that share increases in value, you make a profit. If it doesn't you end up in negative equity.
The fact is, you can get on the property ladder, in a very nice property and make a profit on the property on shared ownership schemes. Getting my foot on the property ladder through a shared ownership scheme has been the best investment of my life at 24. It won't work out the same for everyone. But just like renting has a place in the market and is better for some people and just like full home ownership has a place in the market, Shared Ownership has it's place too.
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