High value shared ownership property?

pictoclick

I'm considering buying a relatively high-value shared ownership property in London. It is currently valued at just over 800k (2 bed) -- new build, not yet finished being built, in a highly desirable area (just outside zone 1). The privately valued flats in the building range from 500k - 4 million, depending on size and floor level, so 800, is considered "affordable housing". Many other flats in the area are worth 800k or much more (1 million plus). 

Having read through lots of SO threads on here, I'm starting to have a slight worry that if I were to want or need to sell in a few years time, the property would be worth so much that no one could qualify to buy it on the SO market under current restrictions. Maybe in London these prices are becoming more and more of the norm, given the fact that very many flats cost this much. Is my concern relevant, or is this pretty typical for modern day London prices? I've seen quite a few upwards of 650 even for 1 bedroom flats, so maybe I'm overly worried. 

The other comment is that whilst I don't know how long I will live in the flat (could be a few years, could be 10, could be longer) I don't know how easy it will be for me to staircase to the top value, given how pricey it is. I haven't decided yet whether I want to outright buy it at some point, or just try to pay off my initial % -- a lot will depend on the housing market and my life choices over the next 2-3 years most likely. 

hazyjo

How much could you afford without the SO?

pictoclick

hazyjo said:

How much could you afford without the SO?

In London, not much. I qualify for absolute max like 320k (some lenders/banks I check online say more like 290), but in London I'd have to move way out to get anything for that cap given most 1 beds cost at least 400ish. Also I'd ideally like to get a 2 bed because I work from home all day every day and my job have already said that will be mostly permanent forever, so I don't want to be stuck in a 1 bed for years to come. 

Additionally I'm a long-time non-eu immigrant and although I've already checked with mortgage advisors and banks and I can get a mortgage with a couple places, I have to pay a higher deposit because of that (in no small part due to covid situation at present). Sounds like 15% is the current minimum that I could find, so I can't put down a standard 10% deposit. I can afford to do 15% on a 200k mortgage, but not on a 330k one. Shared Ownership gives me the best options right now for not having to move to zone 6 into a fairly dumpy flat that's too small for me and doesn't have proximity to things I need (ie walking distance to doctors, high street, even hospital etc).

diggingdude

if you can work from home why not leave London and move to a nicer part of the country, usually get more for your money etc?

[Deleted User]

I’d say exactly the same as the previous poster ! Work from home in a beautiful rural area would be a dream !

Back to your situation now though. 

How much is the mortgage, rent on unowned part and service charge altogether ?
with other debts is that 45% or less than your Net salary ? 

AdrianC

pictoclick said:

Additionally I'm a long-time non-eu immigrant and although I've already checked with mortgage advisors and banks and I can get a mortgage with a couple places, I have to pay a higher deposit because of that (in no small part due to covid situation at present). Sounds like 15% is the current minimum that I could find, so I can't put down a standard 10% deposit.

85% max LtV mortgages are fairly widespread currently, so it's not a nationality thing. I presume you have ILR?

You've only got £30k equity saved up, and you're looking at - what - 25% of an £800k flat in prime central London...? And what will the service charges and ground rent on something like that be?

I have to admit, I think you're absolutely barmy even considering it. Get out of London to civilisation.