Property developers getting desperate??

bluejake

I was looking on rightmove.co.uk and saw shared ownership properties offered at 25% ownership, presumably the buyer then pays rent on the other 75%. What would be the bloody point owning 25% - why not just rent?

http://www.rightmove.co.uk/viewdetails-19279631.rsp?pa_n=1&tr_t=buy

The shared ownership percentage seems to be getting lower and lower. I used to see 75%, then lots of 50% ownership, now 25%! You would think the developers are running out of buyers. What next 15%? then 5%? ownership?

Jorgan_2

The shared ownership isn't usually run by a developer, its run by the Housing Association who purchases the property from the developer. If there is a scheme for 25% shared ownership, its because there is a demand for it, nothing to do with a desperate developer.

macaque_2

Jorgan wrote: »

The shared ownership isn't usually run by a developer, its run by the Housing Association who purchases the property from the developer. If there is a scheme for 25% shared ownership, its because there is a demand for it, nothing to do with a desperate developer.

Alright, so what possible benefit can their be of owning 25% of a property? You are shackled by a minority share in an iliquid asset.

willsonline

its gets you a foot on the property ladder. i.e. "Equity" In 10 yrs time your 25% may be worth alot more than what its equivalent was at today's prices.

And yes...SO schemes are coming down to 25% because most properties are just not affordable at 40% - 75% even then.

Im in the process of haggling on Shared Ownership with the HA, it just shows how much the market has slowed, in fact its stagnant!

chickmug

macaque wrote: »

Alright, so what possible benefit can their be of owning 25% of a property? You are shackled by a minority share in an iliquid asset.

To get on the house ownership ladder.

m00m00

how about 12.5%

http://www.rightmove.co.uk/viewdetails-17287682.rsp?pa_n=1&tr_t=buy


and no they aren't worth the asking price, by a long way.

willsonline

and your a not shackled at all, you clearly havn't looked into these schemes have you?

After 1 yr you can sell your stake, usually the HA has first refusal, they have to find a buyer within 14days, if they dont you can sell on the open market.

Even if you sell back to the HA you can get an independant advisor to value your share, so it will be at market value.

HOPEFULLY YOU WILL MAKE A PROFIT!!!

m00m00

virtually no one who buys a property today will make a profit in 12 months time, when all the transaction costs are taken into account.

doubly so on a new build.

brit1234

Jorgan wrote: »

If there is a scheme for 25% shared ownership, its because there is a demand for it, nothing to do with a desperate developer.

Really?

No its gone from 50% - 25% because of rampant house prices inflation. Its simply people in 25% areas can't afford 50%.

People who deal in shared ownership schemes are getting desperate. If you don't believe have a look at the uptake of these schemes, it is low and been recognised a failure. Why do you thing the government tried to relaunch the scheme this budget with added incentives such as stamp duty concessions.

Housing associations are getting worried because they are not selling. There are a number of cases where they and builders are now trying to sell them as council houses.

willsonline

brit1234 wrote: »

Really?

No its gone from 50% - 25% because of rampant house prices inflation. Its simply people in 25% areas can't afford 50%.

People who deal in shared ownership schemes are getting desperate. If you don't believe have a look at the uptake of these schemes, it is low and been recognised a failure. Why do you thing the government tried to relaunch the scheme this budget with added incentives such as stamp duty concessions.

Housing associations are getting worried because they are not selling. There are a number of cases where they and builders are now trying to sell them as council houses.

I agree with you up to a point. I am thinking of Shared Ownership in Gunwharf Quays in Potsmouth.

Basically it is the most affluent part of Pompey, the HA are selling these at 125K, with a 40% stake, which is a bargain!!!

Now i was told there was no negotiation on the 40% equity stake, but on the weekend i got a phone call saying they may be willing to go down to 25-35%.

It makes it more affordable and plus most other 1 beds in Gunwharf are going for about £150-160k.

Not bad really...

baileysbattlebus

They have had shared ownership from HA's in this neck of the woods for a long time, under normal circumstances there has been a need for them here for years.

If shared ownership is sure sign that price are about to fall, they must know something we don't, 2 familes we know have been in shared ownership for over 10 years, and another has left recently it to move into a fully owned property.

My daughters friend bought a 75% share in a 2 bed terrace from an HA about 4 years ago, she sold it about 18 months ago and with her proceeds was able to move into a 3 bed semi on full ownership. It enabled her in the end to buy a house she normally couldn't.

Another friend bought a 75% share in 2 bed river front flat about 10 years ago, he still lives in it, still owns 75% and it is worth a small fortune.

A friends daughter bought a shared ownership flat over 10 years ago - this was first time I had ever heard of it, she's still there.

Personally I think they are a good way for people who can't afford to buy a house to get a toe hold, especially in areas where prices have been traditionally high.