Shared Ownership

nicola4444

Hi all!


Me and my boyfriend are at the beginning of the saving journey, realistically i want to be looking for a home and settled in our new home by 2020. I hoping by this time we have at least £10k saved and possibly some help from relatives will push this to £15k. We live in the South East but with a £10-15k deposit we are looking at a studio or 1 bed therefore Shared Ownership seems our most realistic option to have a nice 2 bed apartment or house. I have scrolled through posts and articles reading eveything i can about Shared Ownership most dating between 2010 - 2017. Can anyone offer any advice on the scheme or advice in general!



Thanks everyone!

the_quick

I have lived in SO for 6 years. It has it's pros and cons.
We needed just 5% of the share for the deposit. I think lowest share is 25% and highest can be 75%. Of course you need money for solicitors and other costs involved.
South East usually properties go up in price, ours did - so you can still make some money on it when you decide to move on.
As the owner you will be responsible for all small repairs, after warranty, so cooker breaks down you have to fix it, same with boiler etc. You will have to service your boiler annually - leasehold agreement will have more details what you are responsible for.
Big changes, like knocking big whole in the wall will have to be agreed with housing association that hold remaining part of the flat/house.
You will have to pay rent on part you do not own, and if it is a flat - maintenance fee. Ours did not increase a lot, most of the time it stayed same, last year it even went down. But again it will be mentioned in leasehold agreement, how it is calculated.
You can buyout remaining share from owner (housing association usually) either in steps or in one go - it is called staircasing.
If you want to sell it, you either sell your share or you can sell 100%. We sold ours quite quickly, same our neighbours - so I don't think there is a problem with it.
We didn't have any problems with ours, helped us to own a property, with a very small deposit. We didn't do any major changes, just painted here and there and put few pictures up - never had to ask permission to do any changes.
I hope it helps

Toucan_toucan

I have also been a shared owner for 6 years, we bought a newbuild flat in London. We own 30% and pay rent on the rest. We got really lucky because we're only paying about £700/month all-in for mortgage, rent, and service charges and our flat has doubled in value in that time.


As the_quick has said, the main thing to be aware of is that you will be responsible for essentially ALL of the maintenance once the property is past its defects period (assuming you buy it new).


Other things to think about (especially in a flat):


-Parking: new developments are often 'car free' now, so be absolutely sure you'll get parking if you need it.


-Pets: if it's a flat, your landlord will need to give you permission to have a pet, and they probably won't if it's anything that needs outside space (so no cats or dogs, essentially)


-Communal maintenance: you'll pay for this in your service charge, so if your neighbours keep dumping stuff in the bin store you'll have to pay a share of the cost to have it cleared up.


-Heating: many new blocks of flats have communal heating systems with an outrageous standing charge. On the plus side they're often very well insulated, but make sure you really understand what the deal is with your heating/hot water


More generally, you need to check the affordability criteria for shared ownership, and be aware that usually you'll be pushed to buy the biggest share that you can (we put down a 10% deposit on 30%, they were pushing us to put down 5% on a bigger share but we had to show that we couldn't afford the mortgage on the bigger share). The housing association will do its own affordability check separate from that in done by the mortgage lender.


If you go in with your eyes open it's great, but you can get stuck in it so really think about whether it's worth it.

Klr005

We bought 60% share of a 2 bed semi in the south east in 2015.

We entered into a three year fixed term with our mortgage and when it ended, as the house had increased in value, we used some equity to staircase to 100% and obtain the freehold. But you should check the rules of your housing association as I believe some cap the amount you can staircase to, or prevent you from obtaining the freehold.

For anyone buying shared ownership, they shouldn't be put off by the fact that they're responsible for all the maintenance as you'd be prepared for that buying any other property anyway.

I think its a spectacular scheme and we wouldnt have been able to get on the property ladder without it. And, shared ownership houses are often built larger than other new build properties.

Bonniepurple

We had a shared ownership house for 11 years. For me, it gave us security as we paid a very low rent and we were able to buy our 25% outright. It meant that I could work part time and have a second child, and that DH could go self employed.

Paying for all repairs was a pain, but it meant that we could choose- what kitchen we had, what paint to have, curtains, carpets etc.

Would I go for another SO? Not now - but our circumstances have changed considerably. Was it right for us at that point? Yes.

In other words, if it works for you, go for it!