Shared ownership

olb81

As it's very expensive in my town I'm wondering if shared ownership is an option.

II want to ask if it's a regulated/standard setup? Or do each company offer what they want?

I'd like at least 50% share where I can buy more later.

Is there any articles to read about this or anyone got any personal experiences?

Emmia

Many downsides to shared ownership, for example being responsible for 100 % of the cost of repairs even though you're essentially permanently renting part of the property....

user1977

It's generally means tested and aimed at those who couldn't otherwise afford to buy - does that include you?

Myci85

I believe people can struggle to sell shared ownership for a range of reasons, and buying fully is always going to be preferable, however if you can't afford to buy 100%, I would personally consider it as more secure than renting.

My sister is currently in the process of selling her S/O house and whilst she had plenty of interest as there aren't many available near her, the housing association are in no hurry to progress the sale, as she has to keep on paying rent on her share until it completes. For this reason it is taking a long time to sell.

I have also heard it can be harder to sell if you staircase to a large ownership percentage, as most people who want to buy can't afford the higher shares. So you might be best checking that you're buying one that allows staircasing to 100%, and that should alleviate any future issues with selling.

ResourcesShared

You can find information on shared ownership in a number of places including the following sites: GOV.UK, HomeOwners Alliance, and our own site, Shared Ownership Resources. GOV.UK is very factual, and HomeOwners Alliance and Shared Ownership Resources take a dive into pros and cons.

https://www.sharedownershipresources.org

averageguy11

I've been in a 'shared ownership' house since 1987….mortgage now paid off, but I'll be paying a significant amount of rent until I pass as I wasn't able to staircase to full ownership….. not complaining as its enabled me to stay in my home town and along with my ex bring up a family. Yep I am responsible for its upkeep…downside cost/upside I'm in control …only hear from the HA when the rent is adjusted (upwards) each year.

My daughter and husband were in a shared ownership situation until recently when they staircased to 100% ownership and simultaneously sold to buy another house free from SO….I wouldn't say their experience was easy, but then buying and selling never is….and it did get them on the 'ladder' and provide them with a nice home and now in an even better one!

HHarry

We helped our Daughter buy a SO flat and I really wish we hadn’t - although there wasn’t really an alternative available.

The service charge was just increasing from £100 to £160/mth as she bought. It was acknowledged this was a big increase, but significant future increases weren’t expected. Three and a half years later it’s touching £300/mth.

The HA are useless. They fail to provide the required information when requested. They fail to manage and audit the maintenance contract to ensure that work is done. Regulatory bodies and MP’s don’t seem to want to get involved, or lack the power to do anything.

It may just be a spectacularly rubbish HA, and others may be better. And I appreciate it may be the best way for you to afford your own place. But it isn’t necessarily cheap and I think it fails in many respects.

Jmp0001

I often describe shared ownership as the worst of both ownership and renting. You are responsible for 100% of any repairs whilst only owning a share of the property.

Because you pay rent on the share you don't own + service chage on top of the mortgage although you may plan to staircase in reality this can become a pipe dream.

For example service charge has trebled (£80 to £240 per month). In 1 year it increased by about £60 per month

Rent has increased by 40% and goes up every year, a few years ago the increase nearly 10% in one year which was close to £40 a month. I've paid significantly more in rent / service charge then mortgage repayments.

On top of that you are exposed to interest rate increases

You may also be subject to large repair costs (for example £12k per flat for a new roof) not to mention if property is "managed" by a housing association if my experience is anything to go by they are appalling and charge extortionate amounts for repairs when they can even be bothered to fix issues (3 years to fix an intercom, 6 months to fix a light, 5 months to fix a lock are just some examples on a very long list of issues).

They can't even provide accurate year end accounts on time. Recently they have been 2 years.

Also generally any additional shares are purchased at the current market value so the cost will increase

Plus if you did fall behind with rent and service charge you can still be evicted

Maegi

A friend bought his in east London ten years ago and due to some rapid job promotions was able to staircase to 100% ownership in about five years. He is very happy with his purchase and couldn't afford a comparable property now.

However, definitely look into service charges and in particular any common services/areas - I looked at one when I lived in London and everything seemed reasonable (for London anyway) The initial mortgage & rent combo was as comparable rent alone but I was also fully responsible for the (uncapped) service charge and was heavily restricted who I could resell to or even temporarily rent to if I wanted out.