Shared Ownership - advice please !

missJC_2

I am considering buying a shared ownership property and would appreciate any advice on the benifits to be made from shared ownership - if any !!

The property I am interested in is a 2 bed £155,00 flat, £77, 500 shared ownership. The rent is approx £200 per month with a service charge of £85 per month which includes building insurance.

I plan to stay for at least two years, have read all the scare stories about house prices dropping but I really can not afford to buy out right and there are very few shared ownership houses in my area, they are all new build flats. I think it would be wise to buy instead of wasting money on rent.
Would anyone agree or has anyone else bought a shared ownership property and benifited or lost out ???

rae1202

who is it shared ownership with

RoxieW

I have a shared ownership house and would wholeheartedly recommend it. The way I see it is that I cant really lose - if prices rise I earn equity on 50%, if prices fall I only have half the risk. The rent on the HA 50% is low- far lower than going rate. The only snag is that I'm responsible for all repairs/maintainance/upkeep - but on the other hand, I can do whatever I like with the property.
Another plus is that I feel it will be easier to sell when we do come to sell, as a shared ownership.
Good luck with your decision.

MadSebW

We are in the middle of buying right now. I think it's a bit of a joke if i'm honest because it's suppose to be affordable. Well for us, it certainly isn't. We had no other choice but to use this scheme though. Our house is worth £140,000, our share is 44% so our mortgage is for £61,700. The repayments for that a month is £409, our rent for the HA is £154 and our service charge hasn't been mentioned yet. We are paying monthly as much as some people pay for a full mortgage but gaining only half of the property.
The buying process has been a nightmare. We are well over 3 months into this so far still without a completion date, or any sign of it being soon. The HA are slow.

We really had no other choice but to do this though.

Christal_2

Well we have bought our sharedownership property outright 3 years ago, I kind agree with MadSebW that there isn't much benefit buying the sharedownership, because you still need to pay rent on the part which you don't own, and it usually means the adding up your mortgage payment, the total you are paying will be rather similar to what you need to pay when you have a mortgage for the whole property. So it's really for people who can afford the monthly payment, but can't borrow that much to buy the whole house.

You will need to check carefully on the t&c when you want to sell your share of the property, as it can be very complicated and you may have to sell at a price the other party agrees with only. Also the t&c on how you can purchase the rest of the share, again it can be complicated and you may have to buy at a price not decided by you.

purple12

I bought my Shared Ownership flat about 3 years ago. I'm really pleased with it as I'm paying out just about the same as I did for a one-bedroom flat and I have a much nicer and much larger two bedroom flat. To me, it wasn't a major consideration about the changes in property prices. I wanted somewhere secure to live after years in rented accommodation and house-sharing and somewhere that I could settle. I can comfortably afford the rent and mortgage and to be honest, I looked into buying a higher percentile when I first bought the property but the extra that I would have paid in mortgage repayments was significantly higher than the reduction in rent.

Either way, it is working for me

Richard_Webster

It is obviously a good idea in principle but the issue always is whether the flat is worth £155K. Will it sell for that in 5 years time? You might have to wait some years before the flat is worth more than it is being valued at now.

If this is one on an estate with private flats in other blocks, try being cheeky and going in and expressing an interest in one of the private ones to see what kind of goodies, discounts etc the builder is giving to sell those. If the builder is offering to "pay your 10% deposit" then you know he thinks the flats are only really worth £139,500! You could then try (and you will have a job) convincing the HA that the flat is only worth £139.5K (or whatever) and you should buy it for 50% of that.

Trouble is that HA probably won't budge (they may have paid the full price to the builder!) so you are left with going for it and hoping that despite the worries about new flat values, it will eventually go up in value so your 50% share will be worth more.

RoxieW

I disagree - we're not paying as much as for a full mortgage.

My sums work like this - £400 mortgage £120 rent = £520
We would be paying £800 so are saving £280 a month which we save for the deposit on our next house IYKWIM.

Its worked out great for us - we could only afford horrible ex council or tiny terraceds - but instead we live securely in a lovely new 3 bed on a nice estate.

rae1202

i live on a housing association estate which is half rent ,half shared ownership nothing but trouble full rent around 320 on 3 bed shared on half (£62000) mortgage and 220 rent today we had the pleasure of anyother drugs raid at a house that has the police and anti social behavior a daily fixture but they do naff all about it and we were told everyone rent and owners been properly vetted he is fully rent (dole-ite) doesnt getted kicked out tap on wrist told a naughty boy so these house that some have part bought at minute are costing too much as he is dragging down estate so be careful when buying

missJC_2

Thank you all for your advice it is much appreciated !!! It is a difficult decision to make so I am happy to listen to anyone who can help me make the right decision.

The flats I like are in a very desirable part of town from Metopolitain Housing, if anyone has bought from them please let me know if you have had any good/bad experiences : )

clk299

My friends have bought from Metropolitan Housing and love their flat, it is lovely and they've had no problems as far as I know.

I can't afford shared ownership as the rent+mortgage on a box-like flat near where I live would cost as much as a mortgage on a better place, so no point for me, but another friend had her SO flat for dead cheap overall but in a different area. One of the pitfalls of living where I live to be honest!