omega0684
|
| posted on 30/12/10 at 06:56 PM |
|
|
shared ownership
Evening all,
with my luck of finding a pot of gold at the end of a rainbow deminishing at an exponential rate my quest to find a reasonably price house or
accomodation in MK is dwindling to!
i have however found a couple of properties that have a 50% shared equity scheme on them that are within my budget.
Has anyone had any experience with shared ownership?
what are the pro's and con's
All the best
Alex
I love Pinto's, even if i did get mine from P&O!
|
|
|
|
|
blakep82
|
| posted on 30/12/10 at 06:59 PM |
|
|
you automatically lose about half of the lenders who won't give you a mortgage. RBS & Nat West for example. i wouldn't touch them two
anyway, but they def won't do it, and i think many others won't do shared ownership either. don't know which ones though
________________________
IVA manual link http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1081997083
don't write OT on a new thread title, you're creating the topic, everything you write is very much ON topic!
|
|
|
Ninehigh
|
| posted on 30/12/10 at 09:09 PM |
|
|
Pro: You might be able to afford a mortgage
Con: You're paying a mortgage on one half and rent on the other
You're paying for about 50 years
|
|
|
loggyboy
|
| posted on 30/12/10 at 09:20 PM |
|
|
We have been in shared ownership since 2007, best move ever!
We were paying more a month to rent a 1 bed corner house with a tiny front garden, no rear and 2 allocated spaces.
We now pay about £50 less in combined mortgage (repayment) and rent for a large 2 bedroom (only 10 yrs old) with good front and rear gardens, plus the
bonus of a garage and drive for 3 cars.
HSBC sorted us out with an excellent mortgage.
When we were looking to buy outright, our deposit and income meant we were looking at getting a 1 bedroom house or flat and would have cost us nearly
twice what we currently pay.
By going S/O meant we could easily afford the house, and nice things like TVs, holidays, new cars, a baby and (eventually) a kitcar.
Our S/O is with a local housing assocation which to be fair, do seem to be cheaper than other H/A's ive come accross.
Cant think of any negatives really, ok you only get 50% of any equity and not all lenders can deal with it, but more and more do as more than just HAs
are now offering SO schemes.
Other benefits include staircase options (you can buy incremental portions of the rest of the property and reduce the rent. Some HAs even offer rent
free deal when you buy 75% of the property (sadly not ours)!
[Edited on 30/12/10 by loggyboy]
[Edited on 30/12/10 by loggyboy]
|
|
|
morcus
|
| posted on 30/12/10 at 10:37 PM |
|
|
I applied for one on a new build only to be told they didn't think I'd be able to get a mortgage, for like 17.5K (It was only buying 20% I
think on a flat).
Do your research, some equity has to be better than none, I really hate renting.
In a White Room, With Black Curtains, By the Station.
|
|
|
RK
|
| posted on 30/12/10 at 10:41 PM |
|
|
The issue I think will be when it comes time to sell on.
|
|
|
morcus
|
| posted on 31/12/10 at 12:58 AM |
|
|
I think they have a garanteed buy back agreement so that when you do move you'll get a lump sum back, in theory.
In a White Room, With Black Curtains, By the Station.
|
|
|
loggyboy
|
| posted on 31/12/10 at 02:45 AM |
|
|
quote:
Originally posted by RK
The issue I think will be when it comes time to sell on.
Very simple, the HA will have a set time to sell it to someone on the housing register (usually 8 weeks or so) which i would expect is fairly easy as
when we applied for ours there were 8 people in the running, us being 2nd, but the 1st being refused a mortgage. ('Position' being based
on your 'need' (ie size of current house vs size of family, current accomodation security/cost etc etc)
After the set time it can be sold on the open market, which would obviously depend on the house but in our case I know would sell very fast.
[Edited on 31/12/10 by loggyboy]
|
|
|
zilspeed
|
| posted on 31/12/10 at 08:08 AM |
|
|
Our first house was shared ownership.
At that time, (1993) I was still at University and my wife was on a fairly basic wage.
There was no chance of local authority housing and private rented was way too expensive.
Then a local association advertised shared ownership, from 25% shares upwards.
The mortgage and rent combined were affordable. They also pointed us in the direction of a friendly mortgage lender.
This was in the days of 95% mortgages, so our deposit was 5% of 25% of £48,500.
So other than legal fees, we moved into a brand new house for £600 quid deposit.
Brand new house in a really nice bit, fully carpeted communal halls and stairs, all white goods.
In our case, there would have been no other way to get our own place, so it's fair to say I'm a fan.
Now, when time came for us to move on the market had actually fallen.
Our initial purchase price of £48,500 had fallen to a selling price of £45,000.
But our share, being only 25%, we only had a 25% share of the financial hit too.
So, we lost £875, rather than £3,500.
In today's very uncertain market, I don't see that as a bad place to be.
Deposits right now are relatively huge and private renting is very expensive as a result of many people being forced into it.
I agree with many who have said that renting isn't what you want to do long term, but how do you get your foot onto the ladder ?
For us, shared ownership was a very good thing.
We went from my wife's mother's spare bedroom ( as was the local tradition back then) to a brand new 2 bedroomed flat in a nice area. All
this when there looked to be sod all chance of anything for years to come.
Shared ownership - I'm a fan.
|
|
|
JoelP
|
| posted on 31/12/10 at 09:18 AM |
|
|
i'll accept it works, but i cant understand either why it works, or how it is funded.
If we take a simple example of a 100k house with a 50/50 split, you basically pay the interest and repayments on one half. How does the HA fund the
other half? Someone must be paying their interest if they got finance for the project. If the rent you pay is covering the interest, then surely you
arent far off the cost of buying the lot (all thats missing is the capital repayments on one half)
Plus you can apparently get a bigger house than if you had to pay for the lot - but surely since you are comitted to paying the rent as well, its no
more affordable than 100% ownership, so the bank should take this into account when doing the 3x or 5x your wage calculation.
Doesnt make sense to me, though clearly posters above say it works fine!
|
|
|
loggyboy
|
| posted on 4/1/11 at 01:40 PM |
|
|
quote:
Originally posted by JoelP
If we take a simple example of a 100k house with a 50/50 split, you basically pay the interest and repayments on one half. How does the HA fund the
other half? Someone must be paying their interest if they got finance for the project. If the rent you pay is covering the interest, then surely you
arent far off the cost of buying the lot (all thats missing is the capital repayments on one half)
Plus you can apparently get a bigger house than if you had to pay for the lot - but surely since you are comitted to paying the rent as well, its no
more affordable than 100% ownership, so the bank should take this into account when doing the 3x or 5x your wage calculation.
Doesnt make sense to me, though clearly posters above say it works fine!
They mostly own their housing stock. HAs are funded by the government and are technically are 'assisted' by developers. They get new
houses cheaply, by there being planning guideance for creation of HA developments. ie when planning is granted for most housing schemes over a certain
number of plots (depends on area for levels, generally london is 1:1 (ie 2 new house - 1 must be HA), other areas its 14 (ie 14 new houses, 7 of which
must be HA etc)). This gets jointly funded by the HA(govenrment) and the developer.
|
|
|
JoelP
|
| posted on 4/1/11 at 05:58 PM |
|
|
cheers for that, its a poor day when you dont learn something!
Might look for one myself! 
|
|
|
