Is now a good time for 1st time buyers,?

MaterialGirl*

My shared ownership also used to be a lot cheaper than any rented flat I could have bought at the time.

I did actually then staircase up to 100%. So now I’m not living in a SO but I’m very glad I made that decision initially to buy a SO. 

I’m not saying shared ownership is for everyone, just that it can be very useful, it definitely was for me. Calling it a scam is not right in my opinion.

stampystamp

To rent a private rent the same size/spec house in the area I am buying in, it would be between £1400-£1600 a month. My rent, mortgage and service charge come to under £800... (£780 to be precise). So I really doubt that this house would be more expensive to run than private renting a house where I could save nothing and ruin my chance to ever save a deposit. I’ve lived in private rentals for 8 years and had decent landlords, they still wouldn’t allow me to decorate. To put it in perspective, I paid £1,100 for a one bedroom flat in the same area... without a garden. Like I said, I am not saying that it’s a perfect scheme it most certainly isn’t but it certainly isn’t a scam either.

cii4ps

@MaterialGirl* Oh it's quite definitely a con, and I consider it a legally permitted scam as well. Or maybe I should call it a scheme.
If you read what I said, I never said that for some it wouldn't possible to eventually fully own the property. (I'd say most don't, or get stuck in the deal, read all the horror stories online). What I'm saying is that if you put all the numbers in a spreadsheet, you see that it doesn't make financial sense and just by having a bit more patience you can get much more with your money.

MaterialGirl*

It’s definitely not a scam, but yes it’s a scheme to help people on the property ladder.

I do agree with you that for some people SO doesn’t make sense, but for others like me, it can be a great opportunity.  

I did my research and I read all the horror stories before I bought my SO, but I based my decision on my own finances and financial outlook. I think that’s something everyone should do to decide what kind of property, if any, is right for them. Financially I personally made a profit even after all associated costs.

However, I realise we won’t agree, so I’ll leave it at that.

stampystamp

The only time it isn’t a good idea is when you plan on selling within a few years of owning...  or if you staircase to like 70% and then try to sell as the people you will be looking to sell to could possibly stretch to afford to buy a house without the scheme. 

tim_london

OP - Shared ownership is not necessary a bad thing especially if that is all you can afford based on the 4.5X annual income calculation.  However, it sounds like your daughter is on a respectable income if she has saved £18k so early in life.  Is there  another reason why they want shared ownership instead of buying outright?

Interest is at all time low - so it does make sense to buy now.  When the interest rise again and when your daughter wants to remortgage in 5 years time then she'll have more equity to negotiate a better deal.

However, being tied down to a mortgage so early in life may not always be a good thing, especially if your daughter has a career to pursue.  Depends on what her profession and aspirations are.