Is Shared ownership possible at age 54?

whizzywoo

ThorOdinson said:

whizzywoo said:

My brother who is 63 years old recently bought a shared ownership house.  It was a new build 3 bedroomed semi.

The purchase price was £250,000.  He only wanted to buy 25% but the Housing Association insisted on 30% so he went with that.  He had a 10% deposit for the 30% share.  

So 30% of £250,000 was £75,000.
Less his 10% deposit of £7,500.
So he managed to get a mortgage for the balance of £67,500 over a 7 year period.  So he will be working until he is 70 years old.  
And then of course there is the rent to pay for the 70% he doesn't own.

The Housing association will do an affordability check and you would be best going to mortgage broker for the mortgage part.  You are younger though so it might not be as much of a problem for you.

There are quite a lot of hoops to jump through and the Housing Association places a lot of restrictions on what you can and can't do.  The purchase price was probably too high for the area by about 10% but he didn't have a lot of choice.  There are quite significant legal fees to be met if you want to buy further shares in the future.

This particular Housing Association only lets you get up to 90% ownership and if you sell you have to offer it back to them at a current valuation.  If they do not complete on the sale withing 8 weeks you can offer it on the open market.

What is your brother going to do when he reaches 70 and has to pay the rent? Work until death?

I've no idea!  And I don't think he does either.  

whizzywoo

Myci85 said:

ThorOdinson said:

whizzywoo said:

My brother who is 63 years old recently bought a shared ownership house.  It was a new build 3 bedroomed semi.

The purchase price was £250,000.  He only wanted to buy 25% but the Housing Association insisted on 30% so he went with that.  He had a 10% deposit for the 30% share.  

So 30% of £250,000 was £75,000.
Less his 10% deposit of £7,500.
So he managed to get a mortgage for the balance of £67,500 over a 7 year period.  So he will be working until he is 70 years old.  
And then of course there is the rent to pay for the 70% he doesn't own.

The Housing association will do an affordability check and you would be best going to mortgage broker for the mortgage part.  You are younger though so it might not be as much of a problem for you.

There are quite a lot of hoops to jump through and the Housing Association places a lot of restrictions on what you can and can't do.  The purchase price was probably too high for the area by about 10% but he didn't have a lot of choice.  There are quite significant legal fees to be met if you want to buy further shares in the future.

This particular Housing Association only lets you get up to 90% ownership and if you sell you have to offer it back to them at a current valuation.  If they do not complete on the sale withing 8 weeks you can offer it on the open market.

What is your brother going to do when he reaches 70 and has to pay the rent? Work until death?

Many many people are not privileged enough to ever buy their own house and so have no choice but to rent throughout their lives including once retired. I expect rent on a SO property will be less than rent on a private rental. If their pension is not enough to cover the rental portion, they may be entitled to pension credit/universal credit to help cover the cost, just as people who rent at that age. 

Exactly!  Thank you. 

ThorOdinson

I never thought of relying on benefits to pay the rent, but it makes sense. Once you have somewhere to live it's just harder for them to refuse to give you the benefits.