Part Rent Part Buy Help!

Turnbull2000

I considered SO myself for about six seconds. I thought to myself, "if I can only afford 50% of the first rung of the ladder, will I be dead by the time I'm able to afford 100% of the third?".

pennypinchingmum

Thanks for all the advice! Keep it coming, i'm particularly interested in how long it takes from registering to getting a house or flat, since we desperately want to move. I wouldnt mind paying all that rent but the house is really falling apart and typically the landlord doesnt do much. We have the money for a deposit and solicitors but we do have a low income and i'd rather have a crap time renting than not see my kiddies growing up cos i'd me and my OH would have to work every hour god sends to borrow a pitiful amount that wouldnt stretch to a beach hut...grrrr. Again Thanks for all the advice! Keep it coming!

lynzpower

there are definate positives to SO, I had one for a while.

The main positive from a moneysaving POV is that when, for example your earning capacity increases, you can buy extra shares without them being mortgaged.

So, for example while your little ones are at home now, you have limited earnings, but once they are at school for example,you could bring in an additional 8k a year ( guesstimeate). If you can live on your OHs salary and back your earnings, you can steadily pay of wedges of your mortgage.

Once the mortgage share is paid off, you can simply rent the other share ( the rent is protected if you do SO through a housing association) and then pay wedges of the equity off with savings.

With the position you are in ( ie only one earner, with the potential for 2) this approach can work well, it reduces mortgage costs ( ie you overpay the mortgage) and when that mortgage is gone, you simply have almost a peppercorn rent which gives ample opportunity to save towards owning the property outright.

In saying tha I would NEVER recommend going for part rent /part buy with a company ( eg barratts et al) the rents are not protected and I do remember seeing a couple of people on here who had been royally shafted by the arrangement.

Your surveyor will also be able to assess whether the property is at its right value or not but do bear in mind that many new build flats lose significant value over he first few years.

I think also this aspect of "not being able to do much with the property" is a red herring , as buying a flat itself will always have loads of restictions as per the terms of the lease. When I had my SO I was able to redecorate to my taste, fit a new shower, light fittings, and so forth.

alibab

hi again, you mentioned how long it takes?
We viewed the property on 13th july and waiting for contract signing date.
apparantly it has took this long cos the councils housing association forgot just one document regarding cheaper housing, but the council has just started this scheme.
Also as our agreement we can do anything to the property as if it was 100% ours, but this may vary.
the councils housing asc bought these homes from Persimmon, to sell this way to people like us.
Hope Ive helped.

SquatNow

lynzpower wrote: »

I think also this aspect of "not being able to do much with the property" is a red herring , as buying a flat itself will always have loads of restictions as per the terms of the lease. When I had my SO I was able to redecorate to my taste, fit a new shower, light fittings, and so forth.

That's not BUYING that's a LEASE. A LEASE is basically a very long rental agreement.

zappomatic

Yes and when you're buying a purpose built flat they're almost always leasehold.

For the the shared ownership process has been very drawn-out. I was approved by Housing Options (the umbrella organisation for shared ownership in London) way back at the beginning of the year. After a couple of false starts (eg. being sent details of properties where I clearly did not meet the eligability criteria) I contacted a local housing association about a scheme I ws interested in and was invited to a viewing in July. I filled in a form to register my interest but was turned down as with my partner our incomes were too high, and on my own my income too low to qualify for the scheme.

In September I was contacted again, told that they had changed their criteria (I'm guessing the people initially offered flats pulled out or couldn't get the finance together), and I was invited to an interview at the housing association's offices where they needed to see proof of our finances etc and fill in yet more forms. I was then sent a formal offer letter and had to return another form along with a deposit of £400, and from here I've been left to arrange my mortgage and conveyancing. I have to exchange contracts by 11th December.

As you can see there's a lot of jumping through hoops! The scheme suits us as due to a 25% "rent free element" it works out cheaper for us to buy a 30% share than to rent a similar property locally, even when factoring in the cost of furnsihings, maintanence and other expenses and instead of all money going out to a landlord, at least a bit of what we're paying out is ours should we decide to sell up and move.

What is especially appealing is the security of tenure and the knowledge that the rent can't be put up on a whim (tied to inflation). And providing changes aren't too major or structural we can pretty much do what we want with the place after the first year, just have to notify the housing association.