Shared Ownership, or renting for eternity?

EllaJade

Hi!

To start this post, I thought I'd give a bit of context to our situation:

- my partner and I are 22 and 25
- we live in the most expensive part of England, and it doesn't look likely that we'll move anywhere cheaper (careers, family, etc)

We have recently been looking into the idea of shared ownership, and we wanted to know all the info before we made any decisions (which likely won't be for a while) - I just wanted to hear from people and see what the general consensus was on this scheme, good or bad!

My opinion was that for us to rent somewhere semi-decent and somewhat future proof we're looking at about £1,200-300pcm (currently in a pokey 1.5 bed flat for £1,100) and rather than throwing 1,300 at a landlord every month it seemed sensible for a good percentage of it to be going towards paying off the house

Full mortgage's aren't looking likely for us, south east is so expensive and it would take us like 12 years to save up enough to buy off our own backs whereas the smaller SO deposits are far more manageable, I've heard some horror stories about the SO schemes but honestly it seems like we're stuck in a situation where we just have to chose between two yucky options, to be renting for eternity and handing over our money without any 'investment' or half renting from a likely bad company in a badly constructed new build

I guess my main question is - is there ever a situation where SO could be right for you? Or would we get trapped in an awful contract and never be able to fully buy our house, especially with a lot of these new builds throwing weird "service charges" in - whatever that's supposed to mean

Like I said, we just want to gather every shred of info before we make any decisions, I also saw a few Help to Buy properties and though the deposits on those would take quite a bit of saving, is that scheme really any different? A lot of them have way higher monthly costs too

Ugh being a first time buyer now is just painful, my parents bought their little 3 bed terrace back in the 80s for 20k and it's now worth over 350!

Thanks for reading this far xx

asm89

How much do you both earn and are your earnings likely to increase in the short term?

How much could you save while renting over the next few years (you are both still young, so don't feel rushed to buy). Could you live with family while you save?

I've gone the Shared Ownership route, as like you I'm in the South East, and although I earn a good salary, I'm buying alone and saving for a deposit for the same type of flat would have taken me another 2-3 years which I didn't have .

Even with Service Charge and Rent on top of the mortgage, I'll be paying less than the cost to rent a smaller flat. I also have plans to exit after a couple of years and hopefully buy a standard property outside of London, where I can get more for my money.

It's definitely right for me, but a lot of people think it's an awful idea due to the costs and having to deal with a housing association. People are more likely to speak about the horror stories online by the way, so the statistics are definitely skewed.

Help to buy is another option, but you'll need an exit plan after 5 years to avoid paying interest on the government loan.

EllaJade

My partners on 28.5k annually, with it looking likely of I'm going up to 32-35 by mid next year, I'm currently on 23,500 and may well take a small hit as I'm losing my job and changing career path (business is relocating to Japan, wish I could persuade Antony to move that far haha!) Hopefully will be looking at late 20's salary within a year or two if I get the job im after �� but we aren't making any firm housing desicions until I know I'm as settled as he is job-wise

We're pretty good with saving, our usual is to put away 300 a month between us and can hopefully increase that one we know exactly what we're saving up for or have a clear savings goal - I suggested living with family but neither of our parents places are really made for that many adults under one roof, plus they're enjoying their retirement and my old room is now full of rescued hamsters haha!

SO seems to be the sensible route for us too - and you're right about the bad reviews, I let myself get worried by them but people do only go online to shout about he bad stuff with these housing places - and monthly it works out the same or better than just handing our money over to a landlord

00ec25

SO is renting for eternity with the added disadvantage you have to pay all maintenance costs and your rent increases may, or may not, be subject to unrestricted increases

unless you have a realistic prospect of buying outright in the future the only difference is "renting" may be in the private sector and therefore more exposed to the foibles of individual LL.

AdrianC

You're both at the start of your careers, with low salaries for your area. Your £23k is barely 10% over the London living wage for a full-time 37.5hr week.

You say you'll never move anywhere else, but... at this stage in your lives and careers, you have literally no idea.

Chill, continue to take advantage of the flexibility and affordability of renting for a while longer, and make long-term decisions when you're in a better long-term position.

Simby

Maybe head over to some of the budgeting and savings boards as I think if you put your minds to it saving more then 300 per month should be possible on what is a combined income of over 50k

If you could save 30 percent of your combined income the 12 years could become a lot less..

But SO works for many people so I wouldn’t discount it entirely...