Shared Ownership in London

MarmotV

Some advice needed on purchase of shared ownership home in London:

Pros

·       I can afford 75% of it

·       My salary is likely to rise in the coming year allowing me to buy at least up to 90%.

·       I know the properties and area very well as I’ve been living in one of the rented units for many years.

·       It has been inspected for fire safety issues.

·       If I manage to buy the remaining 25%, I will have more flexibility to rent/sell it if my finances take a turn for the worst (though I don’t have any plans to do anything but live in it).

Cons

·       The service charge is very high (£210 per month).

·       The landlord, like many housing associations, tends to do unnecessary works which pushes up the service charge. 

·       They charge quite a bit for any administrative issues e.g. staircasing to higher shares etc.

·       The price could go up quite quickly making it hard to buy the remaining 25%.

I have made one bad financial decision in the past and wish I had sought advice from others, so that’s why I’ve come to you all.

What are your thoughts?

pieroabcd

Have you made sure that you can raise up to 100%?
Lately I've asked to 3 different builders and they always said that I couldn't get higher than 75% with that scheme (new builds).
Not that it applies to all new flats, of course, but I would ask them to write it explicitly in the contract.

Anyway, service charges that are so high are like having to pay a rent.

AFF8879

If you think you will be able to afford 90% of the value within a few years, you’d be much better off saving for a secondary market property. Notwithstanding all the cons of shared ownership, the “full market value” on which the share is based is usually optimistically inflated…