Shared Ownership

guppy

ixwood wrote: »

I think shared ownership is a mugs game myself. They always seem well over priced. And have conditions attached.

Either buy somewhere you can afford, or don't and save for somewhere you can afford.

I agree. Worst of all, most shared ownership flats/houses are on horrible new developments. Even the full price ones are shoddy, let alone the "affordable" ones.

So, when you buy in, your property is valued in comparison with what all the mugs are paying for their overpriced newbuilds. Except they are getting free carpets/stamp duty paid/fees paid/glossy brochures etc. for their money and you are aren't.

Two years later, the shine has worn off and your's has only gone up by £5000.

Avoid like the plague!

Personally, if I had your deposit, I'd rent and see what happens next year...a drop in prices is looking quite plausible, if there was a big drop, you might be in a great position to take advantage with £25k behind you.

Miss_Sparkly_Star

Hi dcmbarton,

I feel for you as I was 23 when I got my first house (I'm 25 now) and I know what it's like to want to spread your wings.

However, two years ago things were so different with interest rates and the housing market. My friends and family kept saying to me then don't rush, don't rush (but I did) and I think I did overpay for my house looking back.

If I was in your situation I would stay at home for maybe 6 months more, keep saving - that deposit is fantastic. I think so many things are going to happen with the housing market that no one seems to be able to predict, it's best to sit back and wait and see if prices continue to fall (if they do, you will be able to get a bargain where you live)

I know you're not keen to move but I was thinking of a 30 min commute - would that still be difficult for you?

DOn't rent - it's dead money, if things are OK at home stay put and try and get through it by thinking about how much more money you can save whilst staying with mum and dad.

On the grand scale - you're doing really well, I read that most first time buyers are in their early 30's!!

cadenza82

Miss_Sparkly_Star wrote: »

Hi dcmbarton,
I know you're not keen to move but I was thinking of a 30 min commute - would that still be difficult for you?

Trouble is I teach from home, so if I move more than about 5 or 6 miles away I'm going to lose a significant number of students. It's taken 6 years to build it up here, so move too far would put it back to square one.

David

Miss_Sparkly_Star

Oh I understand....i think the only thing then is keep saving and hope the house prices continue to fall. Sorry I can't be more helpful.

DaisyClaire

ixwood wrote: »

I think shared ownership is a mugs game myself. They always seem well over priced. And have conditions attached.

Either buy somewhere you can afford, or don't and save for somewhere you can afford.

Good advice but not always possible for eveyone to 'buy somewhere they can afford'

I currently rent a two bedroomed bungalow which may as well be a shoebox.
In it live, myself, my husband, my three year old and my 9 month old who shares our room.

We need to move, the second bedroom is too small for the two boys to share.

We can borrow £106,000. We have no savings and with children cannot afford to put aside a substantial enough chuck of income each month to save a heartly deposit.

Three bedroomed properties in our area start at approx £130,000.
For the above figure (106,000) we could get a two bedroomed flat - basically the same size accomodation we live in now.

We are buying a shared ownership propery. Market value £140,000, we are buying a 50% share - so 70k, the rent plus mortgage payment plus service charge (which includes building insurence) comes in at less than the price of renting a similar sized property in our area - in fact these are priced at a good 100 quid more per month than the shared ownership property works out.


So, personally, yes I agree, do your homework, BUT they aren't always a rip off, for some of us they are the best option of getting on the hosuing ladder and having an affordable property of adequate size.

eva11

Here is my personal experience of shared ownership. This happened on 1996 When I bought my first flat with my ex-fiance under the shared ownership 50% mortgage 50 % rent. it seemed like the ideal situation financially for us both but it started to go do hill very quickly. My ex-fiance parted company with me within a year and unfortunately our neighbours started being unsociable, drugs busts, youths congregating round one of the kids flats and threatening us with golf clubs etc. Although the police and housing association were informed of this nothing was done to stop it.
I eventually met my husband and decided to sell the property. I was always given the impression that the housing association would take it back off me but this was not the case and I had to sell it on the open market. I had minimal viewers and even he estate agent managed not to explain shared ownership correctly although I had given them paperwork on it. Eventually I had a buyer and about a couple of weeks before completion date I got a phone call that she was pulling out as there were problems with the land plans that should have been put right but werent when the flats were built ie i couldn't sell the house. I got absolutely no support from the Housing association and my lawyer tried to get the plans rectified but couldn't. I eventually contacted my MSP andthe Housing Association Ombusman and ended up having an official meeting with the board of the Housing Association who agreed to buy the flat off me.
This is my own personal experience of shared ownership and im sure the majority of these don't have the problem neighbours that I had.
The final cheek was that the Estate Agent chased me for a completed sale fee apart from the fact they only got me 2 viewers in 7 months and the Housing Association bought it back off me.

Wishing you well in the search for your new home happy hunting!!

ixwood

DaisyClaire, that's part of the problem. You couldn't afford to buy, but you could with SO. So, the bubble is blown up that little bit more. It'll still pop at some point, just take longer. And when it does you're potentially "the greater fool" in all this madnes. I.e who gets left holding the over valued, shoddy lemon!

Cycle consideration should play a part. I have a lot of "working class" friends who brought lovely houses years ago no problem. That time will come again. Have patience and save.

surfcat

Miss_Sparkly_Star wrote: »

Hi dcmbarton,

DOn't rent - it's dead money, if things are OK at home stay put and try and get through it by thinking about how much more money you can save whilst staying with mum and dad.

Ah, that old chestnut again. Pure !!!!!!!!. Is rent more dead that mortgage interest to the bank?

In many areas of the UK now (including Reading, where I live) the rent on a given property is actually less than the interest only portion of the mortgage! This means there us such an oversupply of rental property that landlords are actually subsidising their tennants.

Lets assume you want to buy a 200K 2+1 bed terrace in the Reading Uni area (that's about the going rate). With the op's 20K deposit and borrowing 180K over 25years, assuming 6% rates, the interest payment alone is £900pcm according to http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml (and remember with interest only mortgage you get absolutely sweet f.a. at the end of the term).
Now given that one can rent similar properties for £750-800pcm, it doesn't take a genius to work out that buying is a mugs game at the moment.

Turnbull2000

http://money.guardian.co.uk/property/firsttimebuyers/story/0,,2195234,00.html

First-time buyers pay over the odds

[FONT=arial,helvetica,sans-serif]Are shared ownership homes overpriced? Miles Brignall reports[/FONT]

[FONT=Geneva,Arial,sans-serif] Saturday October 20, 2007

[/FONT]Housing associations are selling new-build part-rent/part-buy homes to financially stretched young adults at prices above the level paid by the association itself, Guardian Money has learned.

cadenza82

I hadn't ever considered renting, but having a look at the very few properties available for rent, for a 1 bed house, which is probably in the worst possible area locally, would set me back some £550 PCM