Shared Ownership - Is it the way to go

Goingitalone84

wjr4 said:

Personally, I wouldn’t have bought a brand new car before I look to buy a property. On £30k, you need to be saving more. How much are your car repayments and how much debt is left for the car? 

As I said above, the car was never something I intended to buy or was in my plans. I had just finished paying off my previous car and was going to be nearly £200 a month better off - it was out of warranty and it just seemed once I had paid the car out right everything started to go wrong so I got rid of it and bought a very reliable vehicle. I pay £202 a month on the car an have £12k left to pay. 

NinjaTune

"NinjaTune, do you think Help to Buy is better than shared ownership? Thanks."

@Miranda25 - sorry, I don't know much (anything really!) about HtB.  I know a bit about shared ownership as my son and his girlfriend bought 50% of one a few years back.  It's been okay so far in so much as they've paid less in rent, service charge & mortgage than they would have in rent alone (they did put down a 20% deposit). 

Unfortunately we are in a fairly expensive area so a 50% share of a 250k, 2 bed flat was all they could afford. Seemed a like a good idea at the time but less sure about it now if I'm honest.  It's a lovely 2 bed garden flat and they haven't had any issues, so I'm hoping they won't struggle to resell at some point.  Unfortunately, because you are restricted as to who qualifies to buy the property, it drastically reduces your 'selling pool'.  I can't see them making a profit from it now, but they should get back what they paid for it.  Not the greatest outcome, but at least it was cheaper rent for a few years and they've paid a bit off the equity.  I wouldn't want them to go into another shared ownership but if you live somewhere expensive it's sometimes the only choice.  

It's early days in the reemergence of the housing market so personally I'd sit back, save hard and see what happens over the next few months  Keep renting and save towards a bigger deposit; really pare back on expenses so you can save as much as possible each month.  Whatever happens, a bigger deposit when you come to buy is going to benefit you.

Are you in a very expensive area?

Miranda25

NinjaTune said:

"NinjaTune, do you think Help to Buy is better than shared ownership? Thanks."

@Miranda25 - sorry, I don't know much (anything really!) about HtB.  I know a bit about shared ownership as my son and his girlfriend bought 50% of one a few years back.  It's been okay so far in so much as they've paid less in rent, service charge & mortgage than they would have in rent alone (they did put down a 20% deposit). 

Unfortunately we are in a fairly expensive area so a 50% share of a 250k, 2 bed flat was all they could afford. Seemed a like a good idea at the time but less sure about it now if I'm honest.  It's a lovely 2 bed garden flat and they haven't had any issues, so I'm hoping they won't struggle to resell at some point.  Unfortunately, because you are restricted as to who qualifies to buy the property, it drastically reduces your 'selling pool'.  I can't see them making a profit from it now, but they should get back what they paid for it.  Not the greatest outcome, but at least it was cheaper rent for a few years and they've paid a bit off the equity.  I wouldn't want them to go into another shared ownership but if you live somewhere expensive it's sometimes the only choice.  

It's early days in the reemergence of the housing market so personally I'd sit back, save hard and see what happens over the next few months  Keep renting and save towards a bigger deposit; really pare back on expenses so you can save as much as possible each month.  Whatever happens, a bigger deposit when you come to buy is going to benefit you.

Are you in a very expensive area?

Many thanks for your reply. I had no idea that it might be not easy to sell shared ownership flats in the future. I have to think about it as I am not sure if I always will live in the UK.
Maybe other people can comment on how difficult it can be in the future to sell flats bought through shared ownership or HTB please?
I am in London and currently for £250k you can get only studio or one-bedroom flat. I like the idea to have garden flat but I never saw advertisements with garden flats. Or is it something I have to ask?

andybirstall

Currently renting privately for £700/month. My wife has just retired on I'll health early 50s, I'm 55 and working full time. 
Attraction of shared ownership to me is the saving in monthly rental. We would be able to pay cash for initial share, so no mortgage. 
Examples I've seen would leave me paying £240/month for new build house.
Not really interested in buying the house outright, and hoping to make this our final move.
Be grateful for any feedback/advice if anyone has gone down this path before me and found hidden pitfalls.

bucksbloke

If you can afford not to buy a shared ownership property, then you should not buy one. Very difficult to sell. 

Rach273

I was in very similar circumstances when i bought a 75% share in my shared ownership property. I would recommend that you do your research on the housing association, ask to see the lease in advance and if possible, speak to the neighbours. I've heard lots of horror stories about shared ownership, but it was the only way i could get onto the housing ladder without moving into a town and buying a flat. 
My house was part of a local authority housing scheme which then transferred to the housing association, so I have a lovely long lease, no service charges and minimal rent which only increases in line with inflation. 
3 years down the line and I'm getting married and relocating and although the shared ownership aspect has reduced the pool of potential buyers, it is still attracting lots of interest, as its the cheapest house in the village by nearly £100k!

andybirstall

Thanks for the replies......as I say, I don't anticipate ever selling on. Will hopefully be my last move. Basically trying to reduce my outgoings in preparation for retirement.

General_Applause

bucksbloke said:

If you can afford not to buy a shared ownership property, then you should not buy one. Very difficult to sell. 

That depends entirely on where you are. I have a shared ownership house and the similar ones that have been put on the market are usually snapped up within a month. The private houses on the other side of the road can be for sale for months.

mishan_2

My experience with shared ownership has been positive. I sold a SO flat in London 5 years ago and there were a lot of applications to buy my share. I am now selling my SO house also in London and have been overwhelmed with interest.  I think SO is very popular in London as property prices are so high. 

[Deleted User]

I watch the market daily for a 2 bed SO house in this area for my son. They are literally like gold dust tbh