Shared ownership, what do you think?

smem18

There's a red flag for me in your post: a mortgage advisor also told me (August 2017) that we could get a 90% mortgage on a new build, 1 bed, flat absolutely no problem at all. However, a second mortgage advisor warned us that there was only one lender who offers 90% mortgages on new build flats. There are no lenders offering 95% mortgages on new build flats.

It turns out the second mortgage advisor was absolutely right and I'm so glad we spoke to him! It all worked out fine because we had a 10% deposit and got accepted by the one lender (Skipton) who would do it.

Just to clarify that this only applies to flats. Houses are (or were at the time) different.

So are you sure you can get a 95% mortgage on the remaining amount?

Have you considered the government equity loan instead to top up your deposit? Literally everyone else in the build we bought did the equity loan.

getmore4less

The key with SO is the exit plan(sale to non SO and/or full ownership) or long term viability of SO.

look carefully at any conditions on selling and staircasing to full ownership.

for a long term home it is the ongoing costs as pointed out you are responsible for all maintenance any conditions that could cause you expense, also any ongoing charges like rent.

There are 2 things that can change from not being able to afford 100% of a house to being able to afford 100%, bigger income or cash windfalls.

Increasing value does not really solve the exit problem but can avoid the always being behind the curve trying to save.
Ie the increases on part of a house are worth more than none.

If the interest on the mortgage+part rent are similar to renting then SO can be fairly close to cash flow neutral with the capital payments on the mortgage a form of saving(increase equity) with increasing price as a bonus.

alice2502

I am in need of some advice. My partner and I are looking into buying a share of a 2 bed house through shared ownership. I have been accepted for a mortgage myself but unfortunately my partner is unable to gain a mortgage at the minute. I have heard good things and bad things about SO but one of the main reasons I am unsure whether to buy is that I know I won't make any money on the property as it is already being sold at a high price and I can't see the value going up anymore and also the problems that people have had with selling SO properties. We are currently renting a 1 bed flat but need 2 bedrooms as we are expecting our 1st baby in around 7 months. So do we carry on renting but move to a 2 bed property? We will still be able to save money for the next couple of years (whether we carry on renting or buy) and then try for a mortgage in a couple of years when my partner will be able to get one? Or do I purchase the SO property? I am so confused with what to do. We will be paying more monthly for a rented property but I think in the long run we will end up paying more for the SO property with deposit/if fees go up/the value goes down. We would be looking to live in the SO property for around 4 years.

Leggitte

SO is a good thing, but it not a short term solution. If you plan to only live in the SO for 4 years and then sell your share, I would continue to rent.

kay106

 If you are in a shared ownership scheme and own 35% of the property , and then you were to lose your job and you can no longer pay the rent and service charge, will housing benefit or universal credit cover you these costs?
I am not 100% sure about this answer and I think this something to factor in when deciding on SO, because if you are in a mortgage and can no longer pay your house will be repossessedd and you could be homeless without a shelter! 

Ashtonlawns

Zeni said:

We almost went down the shared ownership road last year - similar to you FTB and wanting to get on the property market but after reading we decided it wasn't for us.
The first thing we didnt like was the leasehold and the fact that however much we paid and staircased up we would never own the freehold in the development we liked (The max we were even allowed to staircase was 75% as they needed to keep the rural affordable housing for the area so couldn't own 100% ever - I would recommend finding this out as you said it was in the countryside and rural properties can have this) Also the restrictions such as having to get permission for certain decorations and although only owning 50% being responsible for all the maintenance and issues with the house - Could put a lot into it but never really get a lot back from it.
Another concern was the ground rent and worrying about how much this may change and increase over the years.
The last thing that really got me was how hard they seem to be to sell on when you want to leave. I have seen a few properties local to me I liked the look off a year ago still up for sale now which were SO but then again it depends what the market is like for your area and if these types are houses are snapped up quickly.

It depends whats right for you! We sat reassessed and realised we needed to hold on for a bit as we were not far off having a 5% deposit for a 120-130k house and kept saving and six months later we are now buying our first freehold home.

If you were able to do it in like 4 years would it be worth it? It seems very far away to get a foot on the ladder otherwise