Shared ownership - should we?

celosia

I apologise if this gets a bit long-winded... Thanks in advance for any help.

Currently I rent a bungalow from a local RSL. I have been out of work for several years due to health problems but these have improved and I am about to start work (18.5 hours a week at 12,177 pro rata with the likelihood of increased hours and training in the not-too-distant future), I should also be able to get some tax credits. My partner lives with his parents, and works full time, earning 10,850. Neither of us has any debts, we are both careful with money, and my partner currently has savings of 18,000, 15,000 of which he is prepared to put into a deposit. We are registered with a housing scheme which covers several local RSLs and from time to time they offer shared ownership properties. I have applied for a few of these, and yesterday I got a call from the owner of one of them asking if we were still interested as the original buyer messed them about for 4 months then pulled out. My partner was intending to start really looking for a property in about 6 months or so, but I am concerned that this is a good opportunity to get a place affordably if it turns out we'd struggle getting enough of a mortgage to buy outright. We are hoping to find the right place for us and stay for many years, rather than working our way up the property ladder.

We saw a mortgage advisor at my partner's bank early last year, when I was on benefits (partner was on roughly the same wage as he is now), and we got an in principle offer of about 45,000 based on a deposit of 7-10,000. Given that I will be earning a couple of grand more, and it won't be affected by us living together as my benefits would, I'm fairly sure we'd be able to get a big enough mortgage for shared ownership. From memory, the shared ownership properties round here seem to require a mortgage of about 60-70,000, to get the sort of place suitable for us in the area we want would be around 120-140,000.

The snag as far as my partner is concerned is that with this particular landlord we would only be able to buy a maximum of 90% of the property (initially it's 50:50), and he doesn't want to feel that part of the house would never be ours, or that we would have any restrictions placed on what we could do with it (new kitchen/bathroom/? in the future). Otherwise the house sounds good, walking distance of town, fairly modern, good parking and enough space inside to be comfortable. We have arranged to view the house on Wednesday (28th) on the grounds that we are not committing ourselves at this point and it keeps the opportunity open to us. I am wondering if renting that 10% (would only cost about £30 a month) would give us certain rights as tenants, or whether it would be a negative and it would be better to aim for a full mortgage if we can. I am about to see if I can get some mortgage quotes online, though am I right in thinking they would go on our credit reports and so it wouldn't be a good idea to do too many? How many would you suggest?

Anyway, I think I have covered the basics, any help appreciated, I have been reading up on financial stuff for a while but this is still a big, scary step for us both...

sarkin

You cant get a mortgage on shared ownersship unless you can stair case all the way to 100%. You partner is right who would want to buy a house they can never own and secondly if you did buy who are you going to sell it on to.

RoxieW

You can get a mortgage on shared ownership - but only certain lenders. Kent Reliance were voted best shared ownership lender I think.