We are thinking about buying a shared ownership house...

MattW602

We have decided to not go for it. We are going to carry on saving, we are managing to save a decent amount a month so hopefully we should have enough to buy without needing the help of SO in the near future.

Petriix

Have you crunched the numbers? A mortgage of £60,000 over 25 years would be under £250 per month. It would be cheaper in total than your current rent so you could build up equity while paying less each month. You'd only be risking devaluation on your 35% share so a 10% drop would only be £7k to you. You're currently paying more than that each year in rent for zero gain. 

MattW602

Petriix said:

Have you crunched the numbers? A mortgage of £60,000 over 25 years would be under £250 per month. It would be cheaper in total than your current rent so you could build up equity while paying less each month. You'd only be risking devaluation on your 35% share so a 10% drop would only be £7k to you. You're currently paying more than that each year in rent for zero gain. 

Yes that’s why I was considering it but we are saving over £1,000 a month and have closer to £16,000 saved currently and I just feel house prices MIGHT drop slightly and put them in reach with a 10% deposit? I don’t know... would we be able to get a £180,000/£190,000 mortgage with a joint income of £56,000 plus £1,600(child benefits) and £2/3K in overtime and work bonuses? If yes then I reckon it’s best for us to wait. I think March next year we would probably have a £21/22K deposit saved plus fees. 

seradane

As someone who knows nothing about shared ownership, are you even allowed to buy a smaller share (like 35%) if they determine you are able to afford more?

But anyway, you've got some pretty healthy salaries for that price bracket. If you take your combined salaries and x4.5 you will get an idea of what the banks will lend you, which in your case is £252,000. Some banks may be more, some banks less, but that's a rough ballpark. So sounds like the real trick for you guys will be the deposit amount. If you can save a decent deposit in under a year then I'd certainly consider waiting. Only exception might be if the SO property is particularly unique/perfect for you?

MattW602

seradane said:

As someone who knows nothing about shared ownership, are you even allowed to buy a smaller share (like 35%) if they determine you are able to afford more?

But anyway, you've got some pretty healthy salaries for that price bracket. If you take your combined salaries and x4.5 you will get an idea of what the banks will lend you, which in your case is £252,000. Some banks may be more, some banks less, but that's a rough ballpark. So sounds like the real trick for you guys will be the deposit amount. If you can save a decent deposit in under a year then I'd certainly consider waiting. Only exception might be if the SO property is particularly unique/perfect for you?

The criteria was a joint income under £80,000 (which we have) and links to the village ( oldest goes to the primary school and we already live here ) so I think we would be eligible.

The house is within walking distance to both the primary and secondary school and with us being a young family it was worth thinking about

£252,000 is more than I thought we would be able to get so that’s good considering the houses we are looking at are valued at around £220,000.