Shared Ownership

msmicawber

I agree with surfcat. I rent and although I pay more in rent than many do in mortgage, I don't have to worry about repairs other than to make the phone call to the managing agents. Neither do I have to worry about what happens to the value of the property if a motorway or night club is built next to it. If I wish to move out of the area, I'm not tied to what the housing market's up to at the time, and my children won't have to worry about inheritance tax.

When I looked at shared ownership schemes a few years ago I thought they really were dead money - paying all the repair charges etc. as well as mortgage and rent without knowing that I'd actually get anything out of it at the end other than to have lived in the same house, paying over the odds for many years.

Many housing associations insist on delaying a sale by a couple of months at the beginning while they see if they can find anyone interested in shared ownership and then, only if they can't find someone, are you allowed to sell it on the open market. The properties tend to be cheaper than other similar properties in the same area, which indicates that their values are kept artificially low, which also means that any profit you do make out of your share will be less than if you owned a share in a non-SO house. You have to get the HA's consent to sell and they charge you in addition to what the estate agent does. A lot of the schemes won't let you buy more than 75% of the property, so they've always got a say in what you do.

I do think they're a terrible con for the most part. It's just something for Gordon Brown and other politicians to chime on about to make it sound as though they're doing something for people on low incomes, and to justify keeping 'key workers' wages low.

ixwood

msmicawber wrote: »

I agree with surfcat. I rent and although I pay more in rent than many do in mortgage, I don't have to worry about repairs other than to make the phone call to the managing agents. Neither do I have to worry about what happens to the value of the property if a motorway or night club is built next to it. If I wish to move out of the area, I'm not tied to what the housing market's up to at the time, and my children won't have to worry about inheritance tax.

When I looked at shared ownership schemes a few years ago I thought they really were dead money - paying all the repair charges etc. as well as mortgage and rent without knowing that I'd actually get anything out of it at the end other than to have lived in the same house, paying over the odds for many years.

Many housing associations insist on delaying a sale by a couple of months at the beginning while they see if they can find anyone interested in shared ownership and then, only if they can't find someone, are you allowed to sell it on the open market. The properties tend to be cheaper than other similar properties in the same area, which indicates that their values are kept artificially low, which also means that any profit you do make out of your share will be less than if you owned a share in a non-SO house. You have to get the HA's consent to sell and they charge you in addition to what the estate agent does. A lot of the schemes won't let you buy more than 75% of the property, so they've always got a say in what you do.

I do think they're a terrible con for the most part. It's just something for Gordon Brown and other politicians to chime on about to make it sound as though they're doing something for people on low incomes, and to justify keeping 'key workers' wages low.

The implication that you'll have nothing to leave them isn't exactly a benefit.

ixwood

How/Where do you plan to live in retirement btw? It doesn;t sound like you're investing for a nest egg. Do you have a really good protected pension?

Miss_Sparkly_Star

We've gone off the point here!! This isn't a rent verses buying thread. (Although if it was, I think for most people one aim in life is for them to own their homes:p )

dcmbarton doesn't want to rent - he wants to get on the property ladder and is looking at the options available.

From what I can understand paying out £550 in rent a month is silly when he can still live at home, assess the property market over the forthcoming months AND still save towards a bigger deposit.

msmicawber

ixwood wrote: »

The implication that you'll have nothing to leave them isn't exactly a benefit.

No, I agree, but it's something I keep hearing home owners talking about.

DaisyClaire

ixwood wrote: »

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.

As I said - I cannot afford to save.

So, 'save and have patience' goes out of the window slightly!

Patience doesn't come into the equasion when you have a 9 month old sharing the bedroom with his parents!

So, im thinking -your advice to me is....

Save and have patience?....even if my 9 month old, gets to 10 years and his 'room' is also mine and my husbands bedroom.:rotfl:
I can see that working a treat!


I am also no fool.

Your opinions are welcome, but somewhat narrowminded. Shared ownership cannot be bad in every instance and I think you need to think a little harder about the pros of it and not just the cons.

msmicawber

ixwood wrote: »

How/Where do you plan to live in retirement btw? It doesn;t sound like you're investing for a nest egg. Do you have a really good protected pension?

I don't know, but since there'll only be me, hopefully somewhere small and not too expensive. I'm a middle-aged single mother on a lowish income so opportunity for investing in a nest egg is rather limited. I've paid into pensions for nearly 30 years, have had better paid and government jobs in the past so decent pension pot, and intend to work as late as I can, so should probably be OK. Once the children are older I can re-appraise the situation.

cadenza82

Well, I have no pension at all!

Bargain_Rzl

I have had a positive experience so far, but I believe I have been really lucky. I bought my flat at a 40% share a year ago. It costs me £200 a month less than either buying or renting would (if you do a search you'll find some of my previous posts on the subject where I've costed this out and proved it).

The development I bought in is one of VERY FEW I have seen lately which wasn't massively overpriced. Bear in mind that newbuilds lose value whether SO or not. However, my flat came at a cost which is about £15k less than the cheapest similar property I saw on the market at around the same time. I really believe I've got a bargain - and I'm protected either way, in that in the event of a price crash I can buy the rest cheaply, while in the event of prices continuing to climb, I can pay off my existing mortgage (which currently stands at about £50k) and have a cheap rent forever. I like my flat, and my neighbours are quiet and considerate. It's only a 1-bed, however the only way I will need more space is if I get into a relationship and have children, in which case there would be another income in the equation - and I know I'm planning on staying in London for the foreseeable future, as I've already been here 8 years and love it here.

However I still stand by my statement that most schemes on the market are very poor value for money. You just need to be very careful you know what you're getting into.

Poppy9

dcmbarton wrote: »

Oh dear, it doesn't sound very good.

Trouble is, I need to stay in the same area, as if I move I will be effectively setting up a 'business' from scratch and won't be earning anything!

Our 3 bedroom family home is worth only £180,000 so there isn't much benefit in selling it and finding 2 smaller houses as there just isn't that much around for those kind of prices.

One thing we looked at was buying a bigger house with a difference of about £90,000 on which I could take out a mortgate. Trouble is we couldn't get a mortgage because of me being self-employed, and my Dad being 65 in 4 years - they wouldn't consider a long-term mortgage as in 4 years time he would be effectively 'retired'.

David

Is it just you and your father living in the house? If so have you considered buying a share of your father's house and extending to provide you with room/privacy?