Shared Ownership - Good/Bad?

paulryan99

Hi All,

Hoping to get some advice from people who have gone down this route.

We are looking at possibly purchasing a property through a shared ownership scheme with a local Housing Association. It will allow us to purchase 40% and as we only have a small deposit, it looks like our only and best way on to the property ladder.

I just wanted to get others advice and opinions on shared ownership. I've heard some good and bad stories about shared ownership and want to make sure we make the right decision. Nobody can predict what will happen now with the economy but is shared ownership a good idea now? 
What other areas of it have people wish they'd known about? Are there any positive stories about shared ownership (Ideally we would like to eventually purchase the full % and/or sell - How difficult is it to sell a shared ownership property)
Any advice or guidance would be great.

thanks

princeofpounds

There is a search function on this forum - use it and you will find many of the issues popping up.

The main problem is that having an equity partner in your house who is also your landlord restricts your freedoms in many ways. That appears to be particularly problematic when it comes to selling the property, when you are essentially working with an extra counterparty (who may be bureaucratic and has different interests to you). One particularly nasty trap appears to be around lease extensions, which you have no statutory right to unless you staircase to 100% ownership. So people have been sold SO on leases that are close to being 'short' (~80yrs), then find that they can't extend the lease, and then fall increasingly into a short lease where it becomes significantly more expensive. 

RebeccaChelsea07

Hi, I bought my flat on Shared ownership 2 years ago with a 40% share. I was lucky enough to have a large deposit so it kept my mortgage low. The process was relatively simple... bit stressful as with any property purchase. Just be aware of all the costs involved in buying as you will have all the solicitor fees (you really can only use selected solicitors that deal with shared ownership contracts), mortgage broker fees (again same as before, only select brokers) and mortgage fees. All that adds on a few thousand ontop. Also, please be wary of Housing Associations. I've only had trouble with them. I'm one of the ''bad stories''. I moved in and 5 months later Network Homes contacted me saying they had given me the wrong service charge figure when I moved in, and it was going to be an additional £120 a month on top of what I was already paying!! So they said I was inarrears and had to pay the missed money of £600 within the week! I tried to fight it as it was their fault but was pointless. That was around christmas time, then of course come April, the usual annual increase of rent and service charge *rolls eyes*. So please make sure you have enough money each month to allow for any suprises and annual increases 

HanPop

Hi, I have a positive shared ownership story. We purchased a 75% share of a brand new house in 2013 so there was no issue with the length of lease (99 years). We couldn’t quite afford to get on the property ladder any other way at that time so it seemed like a good option, plus it was brand new so didn’t need any work doing to it (not sure that I’d buy a resale with needing work doing to it/lease extensions etc).
Also check what the housing association is like, we were with Bromford homes and they were fine. Every year rent only went up by about £3 a month. We ended up staircasing to 100% and it was fairly straight forward and they even had an offer on at that time to pay our legal fees. We obtained the freehold. When we sold we made £25,000 so helped with our next house purchase. 

wjr4

I’ve just bought a shared ownership house. You will always find good and bad reviews about everything but this house means I have a roof over my head, so I’m grateful for that. So far, so good, you just have to be firm with the housing association for snags etc. 

[Deleted User]

I would say only a house that you can eventually staircase to 100% ( some are restricted if rural areas to 80%) 
when you get 100% of the house you get the freehold 
2 bed SO houses around here when 25 to MAX 40% are owned are literally like gold dust ! Soooooo popular 

I would never ever consider a SO flat 

grayg

Coming up to 3 years in a SO flat in London. It's been great for us. There's clearly some downsides, but you just need to balance them up and consider your circumstances. 

For us we now pay considerably less than we did previously to rent much smaller flats, and we're gaining equity to boot. 

Research your Housing Association thoroughly, as most of the downsides to SO are null if your HA aren't useless or just profiteering types. We are with Notting Hill Genesis and they're grand in my experience. They seem to take a very fair / equitable approach to SO. 

Also check all the small print, lease terms, etc. before you get too committed as that'll often be where all the caveats are, if there are any e.g. limits on ownership level, how they uplift rent or service charge annually, etc. 

Good luck!

izoomzoom

SO has been great for us. We are doing our final staircase now. Our HA hasn't bothered us, and when I wanted to convert the garage, I had to get permission. Initially they said no, (because the lease said no, but I pointed out it said no, without prior permission, which was what I was asking for). When we staircased, we provided invoices for the improvements we had made and they knocked 10K off the valuation (ie gave two prices, one as it stands now, and one as if the improvements hadn't been made).
Best wishes with your decision.

Sammiegarlick1

Hi I’m looking for some advise. I’ve been with my partner 10 years and we wanted to buy a house together but as he has his name on a previous shared ownership property with his ex wife and has kids so he can’t come off that Morgage until she sells the property or she earns enough to take his name off so I decided to get a shared ownership on my own for us to live in as I don’t earn enough to buy a full property on my own. We have been in this property 3 years now but I would like to own the full Property. However my wages is still the same as 3 years ago maybe £1000 more. Do you have to have a bigger salary to buy the other share?  As I can prove I’ve afforded Morgage and rent. If I do have to earn more money is there a way of adding what my partner gives me to my income to purchase the other half. Any advice would be most helpful? 

gwynlas

Sammiegarlick1 said:

Hi I’m looking for some advise. I’ve been with my partner 10 years and we wanted to buy a house together but as he has his name on a previous shared ownership property with his ex wife and has kids so he can’t come off that Morgage until she sells the property or she earns enough to take his name off so I decided to get a shared ownership on my own for us to live in as I don’t earn enough to buy a full property on my own. We have been in this property 3 years now but I would like to own the full Property. However my wages is still the same as 3 years ago maybe £1000 more. Do you have to have a bigger salary to buy the other share?  As I can prove I’ve afforded Morgage and rent. If I do have to earn more money is there a way of adding what my partner gives me to my income to purchase the other half. Any advice would be most helpful? 

Sorry but you need to start a new thread in order to get answers. People will not see your question unless they read through this thread from 2020. I have no experience of staircasing but believe you can only go on your salary for affordability purposes.