Discount Market Sale London

elliotwave

Has anyone bought a property on a local council DMS scheme in London? Seems to be a good way of avoiding a large chunk of the risk associated with buying in London at currently maxed out price levels. ... Although they seems to be aimed the luxury end of the market....is this true or are there midrange properties available on DMS?

You effectively get a perpetual discount...its shared ownership without the rent!

Crashy_Time

Not sure I understand how that works?

westernpromise

Don't worry Crashy. If it involves ownership, you'll conclude it's a bad idea.

System

A quick Google shows that they're schemes aimed at helping people who live in the local community. Don't know if each one is different, but this one requires you to be resident or employed in Barnet to take advantage of it. The key risk I can see is that you're then limited when you want to move on, as you can only sell to other people who meet the requirements of the scheme.

elliotwave

The scheme is a little-known but very budget-friendly housing option for buyers priced out of the mainstream market. Under the programme, they buy a proportion of the property — could a third..could be half — using a mortgage. They also have to pay a monthly service charge.
However, unlike traditional shared-ownership schemes run by housing associations, they do not pay rent on the share of the property they do not own, cutting monthly costs significantly.


Selling on shouldn't be a problem as most people are looking to but where they either live or work. So I don't see that being a problem.

As I said above ... its SO without the rent.

When you sell you only get the % age increase or decrease you own but that limits your risk on the downside if property prices do fall

always_sunny

elliotwave wrote: »

The scheme is a little-known but very budget-friendly housing option for buyers priced out of the mainstream market. Under the programme, they buy a proportion of the property — could a third..could be half — using a mortgage. They also have to pay a monthly service charge.
However, unlike traditional shared-ownership schemes run by housing associations, they do not pay rent on the share of the property they do not own, cutting monthly costs significantly.


Selling on shouldn't be a problem as most people are looking to but where they either live or work. So I don't see that being a problem.

As I said above ... its SO without the rent.

When you sell you only get the % age increase or decrease you own but that limits your risk on the downside if property prices do fall

What's the catch then?

glasgowdan

So the council owns half of the property and takes a 50% hit or bonus depending on what happens when it's sold? Has the council got a lot of spare cash to invest in this way? Has the new buyer got the right to make alterations to the property? Does the council pay half of any major repairs?

davidmcn

elliotwave wrote: »

Under the programme, they buy a proportion of the property — could a third..could be half — using a mortgage.

How available are mortgages for this sort of scheme?

elliotwave

davidmcn wrote: »

How available are mortgages for this sort of scheme?

Not sure. I believe it might be the case that not all lenders lend on these properties. But ofcourse there are lenders that will otherwise local councils wouldn't run the schemes at all...and if you get a 50% discount with no rent to pay on the other 50% you are going to tak that mortgage even if the rate is not the best

elliotwave

glasgowdan wrote: »

So the council owns half of the property and takes a 50% hit or bonus depending on what happens when it's sold? Has the council got a lot of spare cash to invest in this way? Has the new buyer got the right to make alterations to the property? Does the council pay half of any major repairs?

That's about the size of it yes. Not sure about alterations or major repairs. I think with repairs, you would fork out as the main owner.

davidmcn

elliotwave wrote: »

Not sure. I believe it might be the case that not all lenders lend on these properties.

If it's anything liked shared ownership then only a small minority of lenders are involved - that could exclude a lot of buyers who don't qualify for those lenders for other reasons.