Shared Ownership Mortgages - advice !

willsonline

you dont need to put down a deposit for S/O properties, well i say that, all you have to do is reserve it (prob about £300) why do ill-informed people keep saying you do???

liz105

you get your mortgage to buy your portion of the property. ie the bit that is legally yours. So if the property is £100k full price and you buy 50% you pay £50k. If you got a £50k mortgage this would be a 100% mortgage. So yes, unless you want to fight for a 100% mortgage you do need to put down a deposit. I should know, Im in a shared ownership property.

liz105

also, do not assume all SO properties are with Housing Associations. Some are private companies, it is not a way to go bust, its a way to get on the housing ladder.

makingendsmeet_2

Ispwich building society do a 100% shared ownership mortgage still. Thats who im with and mine is 100%.. The legal side of shared ownership is a bit of a nightmare.. So be prepare to pay more..

Mac_Sami

willsonline wrote: »

you dont need to put down a deposit for S/O properties, well i say that, all you have to do is reserve it (prob about £300) why do ill-informed people keep saying you do???

Nobody's said that. What we're saying is that due to the difficulty of getting a 100% mortgage, it's advisable to get a deposit.

ruggedtoast

missJC wrote: »

Thank you all for your advice, I just hope buying a shared ownership property is better than renting in the long run, but who knows !!

Most of the shared ownership schemes I've seen are selling newbuilds that are already overvalued by 50 - 80%. You then get the opportunity to buy one third to one half of these properties at the inflated rate while paying a "market rent" on the unowned portion, and with the understanding that you can buy other portions in the future.

I hope having a couple of toes on the property ladder is worth buying into this toxic investment scheme that has only ever been intended to cynically ramp entry level property sales, but before you do think very carefully about how and who sets:

- The rent you will have to pay and any increases.
- The notional value of the unowned portion of the property if you want to upgrade.

Frankly I predict shared ownership properties will be just about unsellable in a few years time - if your only hope of moving is to then buy the rest of the property at an imaginary market rate then you could be stuck there for a very long time.

Frankly I'd rather keep renting but there you go.

minimike2

Wooliwich will look to offer 100% of the share if you have good credit and you are buying at least 40%. The only issue they may have is it being a flat. It might not go anywhere but could be worth speaking to them.

gabyjane

Ruggedtoast: Frankly I predict shared ownership properties will be just about unsellable in a few years time

I know lots of people who have had S/O houses/flats and have sold them just fine and made a nice profit to add..i think at the end of the day if somene likes the house it shouldn't matter what it is i.e S/O..ours is on the coast and has lots going for it..also their will always be people wanting a 'cheaper' property as far as i'm concerned!

missJC_2

Thank you all again for your advice, lets say I put a depoist down for the mortgage what are the risks/advantages in doing this ?

ruggedtoast

missJC wrote: »

Thank you all again for your advice, lets say I put a depoist down for the mortgage what are the risks/advantages in doing this ?

Risks: You end up with a house on an SO scheme. These schemes exist to increase the number of buyers in the market, and continue inflating prices, by using a combination of tax payers money and the buyers own personal debt (and risk) to sell properties that are by definition, so overpriced that the target market cant afford a whole one. Credit crunch anyone?

The market for flats is sinking fast so you could be stuck there watching the value diminish and unable to sell. As the last poster pointed out everyone wants a cheaper property but in the current market just waiting and watching prices to fall will achieve that.

From an investment perspective SO schemes provide the worst of all worlds. If the market keeps rising you could (depending on how long they honour the original valuation) find the unowned amount rising out of your reach, effectively reducing the percentage of what you own. If the market falls SO scheme properties will be the first to be hardest to shift and you may find you have very little say in how much the unowned part of your place is marketed at.

Advantages: You could end up living somewhere you like. As much as I hate SO schemes, it might blow marginally less hard than renting if youre in it for the long haul.