Costs of Shared Ownership?

Benzanna

Hello,
I'm hoping to buy a shared ownership property (just waiting to hear back from the HA to see if I've been lucky or not)

I'm a FTB

Property is £337500 and I'm buying 35% at £113250. I'm only planning on stair casing to 45% before I sell.

Can I please ask for your experience on costs and fees?

My FA said when the mortgage is arranged they'll charge £99 up front then £99 after (mortgage valuation fee?)

I've had a quote of £2k for legal fees which I think is a bit high - this is the bit I'm most interested in. Also at what point do you need to pay the solicitor? up front?

I think I qualify for SDLT relief as I'm a FTB - is that right?

I'd appreciate any input - thanks!

csgohan4

have you considered the costs of 100% responsible for maintenance. If it is leasehold you will have 100% of the bill sent to you, not your 35%.


When selling, the market you sell to will be smaller as more people want to buy 100% of the property

Cakeguts

Shared housing is probably the most expensive way to buy a house because you have to pay for all the maintenance as well as rent on the bit you don't own. So although you only own 35% you are responsible for all of the maintenance bills as if you owned 100% and you pay rent on the other 65% that the housing association still owns.



The property will also be leasehold so you will have rules in the lease about what you can and cannot do.



The fact that you can only afford 35% makes me think that you are living in an expensive area but don't earn the kind of salary that would make living in that area viable for housing costs.


What a lot of people are doing now is changing jobs to one where they earn roughly the same amount but moving to an area where the housing is cheaper. In many parts of the country that amount of money for a 35% share would buy you a 100% of a freehold house. It is just that some people can't seem to be bothered to find out how they can improve their lifestyle by moving.

Benzanna

Cakeguts wrote: »

Shared housing is probably the most expensive way to buy a house because you have to pay for all the maintenance as well as rent on the bit you don't own. So although you only own 35% you are responsible for all of the maintenance bills as if you owned 100% and you pay rent on the other 65% that the housing association still owns.



The property will also be leasehold so you will have rules in the lease about what you can and cannot do.



The fact that you can only afford 35% makes me think that you are living in an expensive area but don't earn the kind of salary that would make living in that area viable for housing costs.


What a lot of people are doing now is changing jobs to one where they earn roughly the same amount but moving to an area where the housing is cheaper. In many parts of the country that amount of money for a 35% share would buy you a 100% of a freehold house. It is just that some people can't seem to be bothered to find out how they can improve their lifestyle by moving.

Hi, I can afford more than 35% but that's all that's on offer.
I have my life and community here so really don't want to move.
Thanks for your advice.

quantumlobster

Be wary of any plan that involves selling a new build house (if this isn't a new build, ignore this post) whilst there will still be actually-new properties on the same development.

Everyone will (metaphorically and literally) walk straight past your second-hand house to the new ones, where they can choose the kitchen and the carpets and be the first people other than the builder to have a poo on the toilet.

00ec25

Benzanna wrote: »

Property is £337500 and I'm buying 35% at £113250. I'm only planning on stair casing to 45% before I sell.

then make a market value election and take advantage of the FTB SDLT relief so you only pay SDLT on the amount over 300k and then never have to pay SDLT again when you staircase later on

System

@benzanna May I ask which area you’re in?

Benzanna

danyalaziz wrote: »

@benzanna May I ask which area you’re in?

South East - Wokingham

eddddy

Benzanna wrote: »

I've had a quote of £2k for legal fees which I think is a bit high - this is the bit I'm most interested in. Also at what point do you need to pay the solicitor? up front?

You should get some more quotes to compare, I sometimes get 5 or 6. And ask about their payment terms (i.e. when you have to pay). And ideally, get recommendations from friends/family.

The south east (including Wokingham) will be relatively expensive for solicitors. So people from other parts of the country might post to say they paid less.

(FWIW, a solicitor in the South East recently quoted me 3 times the legal fee that a solicitor in the North East quoted - for some 'non-standard' conveyancing.)

Most solicitors are very happy to give quotes - as it's a first step to getting new business.

Solicitors will typically want an 'up-front' payment on account. At least to cover disbursements.

Blondetotty

Don't forget you usually also have to pay the HA's solicitors fees when you come to sell or extend your lease as well. I've just been quoted nearly 2k in fees alone just from their side to extend my lease. On top of that will be the premium and my legal fees. Selling, they've quoted me approximately the same in fees and charges from their side so make sure you calculate this as well.

I've made no secret of the fact that I'm not a fan of shared ownership and would encourage anyone to look at alternative ways of buying a home