Shared ownership - is it worth it?

wjr4

I have a SO new build house and no regrets at all. 

Leggitte

wjr4 said:

I have a SO new build house and no regrets at all. 

Same here. Absolutely love it. 3 years in now.

newsgroupmonkey_

tracytown said:

newsgroupmonkey_ said:

tracytown said:

If you have a wage of £22k can you not get a 1 bed flat with a mortgage or is it too pricey down there? Or even a large studio, sometimes have separate kitchens etc.

I was so tempted to say "You're not from round 'ere, are ya", but I'll refrain

A quick mortgage calculator tells me that they can borrow ~£75k (although could be up to £94k). With £25k down, that's a whopping £100k.

Even looking in really, really dodgy areas, I couldn't actually find a 1 bed flat for that in the South East, although I didn't look too hard - Surrey, Bucks and Herts.

Yes I thought £125k, but probably not enough for the south even for a studio. Which is diabolical really isn't it.

I think we'd all agree that house prices in the South of the country are absolutely ridiculous.

I'm on the Northants border, so a long way from London and the bonkers pricing down there. But even here, I couldn't buy a 2 up 2 down for less than £250k.

I've seen that the cheapest area in the country is Middlesbrough TS1. There's a 2 bed house there for £45k right now.

You may say "But that's a horrid area". And yet I could find you some inner city borough in London that you'd really not want to live where you couldn't buy a 2 bed terrace for 10x that!

Unfortunately for many of us, it's work. I've stupidly accepted a job that requires me to be in 2 days a week. My wife is a home worker and previously, I could work from home too. We're still considering where to move to though - those 2 days are likely to involve a commute to get the house and area we want.

missy-

I moved into my brand new SO 2 bed coach house 9 years ago. I initially bought 40% and have recently staircased and now own 75%. My service charge is really reasonable but I know this is not the case with all SO. Also my rent can only increase by a small percentage each year so I know there are no nasty shocks coming on that front. My experience is really positive. I managed to overpay on my mortgage (only little bits here and there when I had some spare cash, but really does make a difference) to bring down monthly costs, significantly, and now I have staircased I hope to do the same again. My property has significantly increased in value (as has happened with the rest of the market) so I now have a sizeable chunk of equity. I still cannot afford to buy anything decent outright which is why I decided to staircase. I have a beautiful home and know that the years I have been spending money on housing are an investment in my future. Renting is never secure (unless from council or HA) and never really feels like your home in my opinion. Just check out the options that are available and view a few places. I feel that renting is a bit of a trap which is hard to ever get out from as rents are so high, makes very difficult to save. Good luck for the future whatever you decide 

Rosa_Damascena

QuestionTime1404 said:

Hello. I am 25 years old living in the South East. In April I will have £25000 in savings (including LISA bonus) and my annual gross salary will be around £22625.

I am looking to move out of my family home and it will cost roughly £750 on a one bedroom flat to rent somewhere. I have found a 2 bedroom shared ownership apartment that will cost £404 rent, £215 service charge and the mortgage on top of this, for a 25% share worth just under £59000. So I would need a mortgage for around £34000. Their calculator says my mortgage repayments should be around £130, which would make it the same price as it would be for me to just rent somewhere (of course there would be solicitor fees, maintenance costs etc).

I have never looked in SO before so wondered if anyone could share their experiences or advice regarding this?

Many thanks

I get that you want your independence, but at what price?

IF they can afford it, would your parents support you with a capital injection? I'd feel much better about paying back the Bank of Mum and Dad than entering into a SO scheme.

getmore4less

Rosa_Damascena said:

QuestionTime1404 said:

Hello. I am 25 years old living in the South East. In April I will have £25000 in savings (including LISA bonus) and my annual gross salary will be around £22625.

I am looking to move out of my family home and it will cost roughly £750 on a one bedroom flat to rent somewhere. I have found a 2 bedroom shared ownership apartment that will cost £404 rent, £215 service charge and the mortgage on top of this, for a 25% share worth just under £59000. So I would need a mortgage for around £34000. Their calculator says my mortgage repayments should be around £130, which would make it the same price as it would be for me to just rent somewhere (of course there would be solicitor fees, maintenance costs etc).

I have never looked in SO before so wondered if anyone could share their experiences or advice regarding this?

Many thanks

I get that you want your independence, but at what price?

IF they can afford it, would your parents support you with a capital injection? I'd feel much better about paying back the Bank of Mum and Dad than entering into a SO scheme.

Makes getting a mortgage a lot harder if you are also borrowing from parents.

Floss

I am in my 2nd SO home with a local housing association, having bought 50% with half cash & the balance mortgage. My 50% was £50k in 2019, for a 2008-built 2-bed town house with driveway and front & back gardens. I currently pay £280 rent, £33 service charge & £200 mortgage. 

The first one was from 1987 to 1994 with my first husband, a brand new 3-bed semi with the local housing association (the only option in the 1980s).

The benefits of being with a housing association are that rent is pro-rata the same rate as similar houses, and are in line with the Rent Standard.

The two SO houses sold in my road since i moved in both went very quickly. The main problem is that only a small number of lenders will give a mortgage on shared ownership resales.

tigger462

SO for me was great, as I had very limited time to move due to circumstances & couldn't rent due to a pet I refused to give up. I've been able to staircase to 100% aswell which I appreciate not everyone can.

I was 50/50. The rent/mortgage for my 2 bed house was about £400 a month less than similar rentals in the area (I'm in a London commuter town too). I wanted a house over a flat too and SO enabled me to do it. I know with flats there are higher service charges too. I liked that I was paying off part of a mortgage but I'm also glad I now have the freehold for my property over a leasehold 

Rosa_Damascena

tigger462 said:

SO for me was great, as I had very limited time to move due to circumstances & couldn't rent due to a pet I refused to give up. I've been able to staircase to 100% aswell which I appreciate not everyone can.

I was 50/50. The rent/mortgage for my 2 bed house was about £400 a month less than similar rentals in the area (I'm in a London commuter town too). I wanted a house over a flat too and SO enabled me to do it. I know with flats there are higher service charges too. I liked that I was paying off part of a mortgage but I'm also glad I now have the freehold for my property over a leasehold 

For me this is the issue. How many people do actually progress to 100% ownership?

I would argue that the first step on the housing ladder is the most important wrt accruing capital. Get it right, and the move up a few rungs becomes so much easier.

tigger462

Rosa_Damascena said:

tigger462 said:

SO for me was great, as I had very limited time to move due to circumstances & couldn't rent due to a pet I refused to give up. I've been able to staircase to 100% aswell which I appreciate not everyone can.

I was 50/50. The rent/mortgage for my 2 bed house was about £400 a month less than similar rentals in the area (I'm in a London commuter town too). I wanted a house over a flat too and SO enabled me to do it. I know with flats there are higher service charges too. I liked that I was paying off part of a mortgage but I'm also glad I now have the freehold for my property over a leasehold 

For me this is the issue. How many people do actually progress to 100% ownership?

I would argue that the first step on the housing ladder is the most important wrt accruing capital. Get it right, and the move up a few rungs becomes so much easier.

Probably not that many. I was "fortunate" to receive inheritance which I used to staircase to 100% - I was saving too but it would have taken about 10 years and that's if house prices didn't completely skyrocket. I think you can only staircase 3 times aswell and obviously you have the solicitor etc fees every time so I wanted to go from 50-100% at once. 

For a H2B flat however when I was first looking, they wanted a £44,000 deposit which I didn't even have anything close to! I didn't have a bad salary then either it was actually madness. Still had to put down £24,000 for SO but renting wasn't an option, nor was staying where I was. I did have relatives help with that part and again I know I'm super lucky that I did. It's all madness.