SO or just carry on renting?

getmore4less

£250pm of £110k is 2.7% that's a reasonable way to measure relative cost.

Remember you are 100% responsible for maintenance and any value you put in will be harder to recover.

obay

Don't forget about your help to buy loan also bringing you lower towards 75% LTV!

cjv

I bit the bullet and am in the process of buying a shared ownership property as I can not afford to buy via the normal route. My advice is to do lots of research, number crunching and be sure you understand all the pros and cons of the scheme before making your decision, I also done lots of research about the HA which will be my landlord.

For me it felt like the right choice, rent a run down tiny flat in a less desirable area for at least £600 a month, or buy 40% of a new build shared ownership flat in a prime location with allocated parking etc. for £655 a month including mortgage, rent and service charges. I do plan to either staircase or use the equity I build up to move on further down the line, but that will all depend on what happens in the future.

The price to rent in my area is shocking considering what you get for your money!

Here is a calculator which you may find useful:

https://assets.publishing.service.gov.uk/media/58d55b72e5274a06b300000e/Shared_Ownership_Sustainability_Calculator_-_June_2017__FINAL_.xls

AliceBanned

Not all SO properties allow staircasing to 100%, so you might want to check that first with the developer/housing association.


Quite a few do allow it. I bought a SO one-bed property 5 years ago and so far it has worked out well for me. I am in a place I really like and is convenient, that I could never have afforded to buy 100% straight away. I am looking to staircase from 40% to 100% ownership in one go by mid 2019, if the finances work out. The property has gone up in value and then down a bit. If I can't get a mortgage to cover 100% I will move elsewhere and buy on the open market. I have gained around £50k in equity in 5 years from buying SO (on my share alone) so it was far better than continuing to rent and I have enjoyed living here too.


It depends partly on what the market is doing - some people have got into negative equity with SO because they had to sell/needed more space after a shortish term so it is always better for the longer term, 5 years plus. You have to pay not only your own legal fees but that of the housing association/owner of the other share usually and also when staircasing, so some costs are higher, but it is not crippling and if you really want to live there and can't afford similar on the open market it is a good way forward.

TheoFB

Can you make offers on shared ownership property’s? It’s not a brand new home so I’m assuming it’s a re sale?

AliceBanned

Possibly not. I couldn't with mine and it was a re-sale - it was a fixed price. In fact there was another person interested and I offered a higher price as I really liked it and thought it was worth more, which the owner at the time was pleased about but the housing association stepped in and refused to let me pay more. So it can work in your favour.


Is the freeholder a housing association? If so they are more likely to go with an independent valuer's price and possibly with shared ownership they also have no choice over this as it is more regulated than open market. The valuation for my initial purchase was fairly conservative - to make it 'affordable'.


I know that when I go for my next share the value has gone up quite high and I won't have any choice - if I feel the valuer/housing association is asking for too much I may have to walk away but I think it will be 'accurate' as far as any valuation can be. ie not inflated price as some private sales can be.

TheoFB

I was too late! it has already sold....