Shared Ownership First Time Buyers

scottch97

Hi. My partner and I are mature (21+) students starting at Bristol and Bath universities this September. We've managed to save ~50k through working and family support, and are looking to see if we can get a place together in the Bristol area, as our degrees are over 5 years long, and somewhere permanent would be nice (and it will mean we haven't thrown out savings all on rent and lose every penny of it).

Properties in the south west are really expensive, and the only way we can afford somewhere is through shared ownership. Neither of us are eligible for Help to Buy so this really is the only option. With a mortgage and rental on the share we don't own, it works out a lot cheaper than the both of us paying £125+ per week on other accomodation, money we will not get back after graduating.

We both have good credit histories and guarantors with good credit, and a joint income at uni of around 18k p.a, so I'm hoping we shouldn't have an issue with getting a mortgage.

I'm just looking for advice and stories really of what to be wary of with shared ownership, what's it like, things to look out for, and any other general advice anyone might have about buying your first home etc.

We've found 2 places we really like that appear affordable to us, but want to check out everything possible before going in for viewings, making an offer etc.


Thank you!

Runningmad

Hi, I posted something similar the other day, hope you get lots of replies. I had a few, take a look. It's all rather daunting isn't it. Good luck.

scottch97

Thanks! I will do.

Every time I think I've thought of everything, something else comes up. Don't want to shoot myself in the foot before I've even started in life!

Runningmad

I know what you mean, I've read so much about it my brain hurts lol. One thing I read was shared ownership is always lease hold, then read once you stair case to 100% the housing association transfers it to you. I hope that's true other wise I think that would really put me off. I am lucky in a way as my friend is way ahead of me and is set to move into hers at the end of the month so I keep bugging her with lots of questions.
The way I see it, it's cheaper than renting a private property and at least in the end hopefully you own the property and have something to show for your hard work.

diggingdude

will you get a mortgage being students?

scottch97

I imagine I will find out! From what I've read and found out so far, I think as long as you have guarantors with good credit scores you are able to apply for one.

amandacat

My house was initially bought as shared ownership, here are some things you may or may not be aware of and my experiences

- I initially bought a 40% share and my monthly payments were much cheaper than renting or a full mortgage plus I needed a smaller deposit. It got me on the property ladder and I started building equity albeit slower than if I had a mortgage on the whole thing

-We were in a position to buy the whole property via a mortgage after 5 years. This was easy to do, we had to pay solicitor costs and pay a chartered surveyor to value the property. This is a requirement and you must pay the price they determine for the remainder of the property. My house had increased in value by nearly 20k in those 5 years meaning I had to get the remaining 60% mortgage share based on the higher value.

- I bought the remainder of the property while stuck in a fixed term deal with Santander, they classed the additional shares as additional borrowing meaning I got stung with a higher mortgage rate than if I was not in the fixed deal as I could have shopped around. The early repayment charge was too high to leave them. So plan to buy additional shares when your fixed term is ending so you can shop around for the best deal.

- Before buying the additional share I tried to sell the house, this was a nightmare. I had to arrange to pay a valuer to determine the price and then the housing association had exclusive rights to sell the property within 30 days. I did not get a single viewing in that time. If they had found me a buyer they charged a fee of 1.5% of the property, not just of the share but the entire value. After the 30 days I was able to advertise with an estate agent, I had lots of interest but the potential buyers still had to apply via the housing association, this was slow and they did not cooperate with the EA and after 3 failed sales we gave up and lost £600 in solicitors fees for work done on the property so far before the sales fell through so a tip if buying or selling is to use a no sale no fee solicitor.

-Once you have a mortgage on all shares you can sell more easily but must give the housing association first refusal to buy it back, this is not a bad thing as they will pay full market value but you will again need to pay the surveyor to value the property and pay the housing association a % as a fee. If they do not want to buy it back then you can advertise for sale with an EA at any price and they have no involvement in the sale. However, potential purchasers need to be made aware that they are under the same obligation to offer to the housing association if they wish to sell or gain permission for any extensions. This could put potential buyers off.

I do not regret starting via shared ownership and on the whole it has been positive.

amandacat

Runningmad wrote: »

I know what you mean, I've read so much about it my brain hurts lol. One thing I read was shared ownership is always lease hold, then read once you stair case to 100% the housing association transfers it to you. I hope that's true other wise I think that would really put me off. I am lucky in a way as my friend is way ahead of me and is set to move into hers at the end of the month so I keep bugging her with lots of questions.
The way I see it, it's cheaper than renting a private property and at least in the end hopefully you own the property and have something to show for your hard work.

My property transferred to freehold once we owned 100%

Runningmad

Hi, only just saw your reply. Thank you for this info, and also the other reply you made. Even though this was not my original post the feedback is relevant.
Thanks