Shared ownership is this the best move.

simon_grimshaw

Hi all. Just looking for a bit of advice on what to do in my situation. 

Basically approaching 40 we have 3 young kids and in private rent. 

I earn a decent wage, wife's stay home mum and she gets UC.

So we need to get somewhere secure.
But the house prices are crazy to buy
literally cant find anywhere in a half decent area whats big enough for a family of 5. 

Really dont want to borrow the maximum the bank will allow me
because of the high payments and added pressure. Plus we would lose 500 plus a month of UC.

So looked into shared ownership i can get a 4 bedder with a 25% stake
with not much deposit and wont lose anything on UC.

Do you fink this is the best move.
any advice
thanks

Myci85

If your current rental is suitable, and no eviction imminent, I'd personally prefer to stay put, save as much as you can for a deposit, and look to buy somewhere in full once your kids are a bit older and both of you working. Presumably that could be in 5 years max once your youngest is in school and even if your partner only works part time she could be earning more than her UC payment. 

SarahB16

simon_grimshaw said:

Do you fink this is the best move.

No I don't.  You would need to pay rent on the 75% that you don't own too.

Follow Myci85's opinion in the reply above.  Also consider a longer mortgage to keep the repayments lower and then as the children get older, leave home and with salary increases hopefully increase the repayments then. 

simon_grimshaw

Thanks for the advice. 

The house prices are to much 1500 a month for 30 years.
pretty depressing

simon_grimshaw

SarahB16 said:

simon_grimshaw said:

Do you fink this is the best move.

No I don't.  You would need to pay rent on the 75% that you don't own too.

Follow Myci85's opinion in the reply above.  Also consider a longer mortgage to keep the repayments lower and then as the children get older, leave home and with salary increases hopefully increase the repayments then. 

I will get the rent paid for i think
bar the service charge

Uriziel

How much is the rent portion of the shared ownership?

simon_grimshaw

Round about 550ish

ExEstateAgent

I have only heard of problems with 'shared' ownership. You pay rent on the % you don't own and ALL of the maintenance/service charges. They often have a short lease and you can't extend that which can make it difficult to sell if you stay there more than 10 years. 

Buying 25% and having the burden of the costs, I would have thought renting was a better option. 

You might be better off buying whatever you can afford without shared ownership and putting up with an area that maybe is cheaper and/or a smaller property and looking to move up later.

Emmia

The people I know with Shared Ownership have found it difficult to sell when they wanted to move. That and the fact that you need to cover 100% of the maintenance even though you only own 25% makes it poor value - you'd be better saving hard, hopefully your missus can get a job too soon to be able to boost the household income.

simon_grimshaw

Thanks for the replies. I have a 5% deposit now
and obviously buying a house is always the best.
All a can afford is a small house and we have moved that many times i just want someone secue.
i pay 1500 in rent now and this shared ownership house is coming out at 1200 a month
and its a 4 bed detached and still get the rent paid for.

Altior

I have a shared ownership success story of sorts.

I feel like you need a strategy in place to staircase to 100% asap. And do it in one go. 

I was pretty unlucky (as usual) as HTB was launched a year later! That was a much better scheme. But I don't regret doing SA.

Mine was a new build via HA (LH), and I've never seen the LL in over 14 years. 

The only jolt really was due to the value of the property increasing, and beginning with 25% ownership, I effectively needed another mortgage for the same value as the whole of the asking price when it was first sold. So my equity gain was offset, but it was still far cheaper than private renting, as even on 75% of the full rent, that portion was tiny as it was based on the social rent value.