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Getting money for a house from my parents?

(15 Posts)
Poppylizzyrose Fri 22-Mar-19 08:54:25

Okay so I did a thread in chat and no one replied. 🙈😂

https://www.mumsnet.com/Talk/_chat/3539676-Advice-about-buying-shared-ownership-please

Basically being gifted deposit and need advice buying shared ownership...got a dd whose 4 months.

Any advice\abuse welcome flowers

TwoRoundabouts Fri 22-Mar-19 09:06:17

My advice is don't buy shared ownership due to the way that rents and service charges can be increased without impunity. There are loads of shared ownership properties around for a reason.

If you still insist on buying it then buy the minimum share you can and have a plan on how you won't be in the property in 5 years.

Oh and if you are buying a flat buy in a low rise development without a lift as it helps to keep your services charges down.

Frenchmontana Fri 22-Mar-19 09:08:49

Advice about what specifically?

Poppylizzyrose Fri 22-Mar-19 09:10:50

Thanks, I think it’s better option than rent tho as at least I’ll own bit of it, single working parent and if it’s owned I can bring my dog. The build in question is also somewhere I’d love to live, a quaint village near where I live now. With an outstanding school, little shop ect. It’s close to friends and family, not far for her dad to get too.

M4J4 Fri 22-Mar-19 09:11:58

Any advice\abuse welcome

You precious snowflake.

Jokes! Congrats! flowers

Shared ownership seems a bit of a con to me, as you have to pay a mortgage and hefty rent on the portion you don't own. I would buy 100% of a cheaper property.

fluffylittleclouds Fri 22-Mar-19 09:12:02

I moved into a shared ownership property 7 years ago with no issues, it allowed us to get a foot on the ladder and we now own a house.

Negative comments are often inevitable on these types of threads but what is really the alternative if full-ownership isn’t an option? My shared ownership property cost a fraction of what privately renting the same house would be. We sold up a few years later with no problems at all and I have no regrets, for us it was a way better decision than renting.

Poppylizzyrose Fri 22-Mar-19 09:12:12

Advice on how to buy a house, where do I start? Has anyone here got shared ownership? What did they do first? I ring estate agents they say they aren’t managing the sale, ring housing association and they told me to ring agent...

Poppylizzyrose Fri 22-Mar-19 09:14:31

I’d love to buy all on my own but I have a low income, think full time min wage, bit of maintance and child benefit(which I’m yet to apply for, form confused me greatly) at the mo living on universal credit. The only silver lining is help with deposit. No way I could buy alone.

TwoRoundabouts Fri 22-Mar-19 09:17:07

OP I suggest you start reading on how to buy a property in general and then how you sell a property. Make sure you understand about leasehold properties and the difficulties you can have with them.

Then look at the specifics of buying and selling shared ownership properties as this can be another form of hell.

All this information is freely available on the web. I started with moneysavingexpert site and forums then found more information from there.

While you cannot be as easily evicted like when you rent under an AST (Assured shorthold tenancy), you can still be evicted by the freeholder because as a leaseholder you are still a tenant.

SpringLake Fri 22-Mar-19 09:18:58

My first mortgage was on a SO property, by myself. Meant it was possible to get on the ladder. It's designed as a stepping stone. Was good dor me, but I only stayed a couple of years.

Even if you get to owning 100% there's still bundles of restrictions and rules which you have to live & sell by. They don't usually explain them until you get to exchanging contracts.

I was lucky, as house price hadn't changed, but you can't argue with the valuation and have to sell for exactly the valuation, otherwise you become liable for 100% of the loss, even the portion you'd expect the SO company to shoulder.

SparklesandFlowers Fri 22-Mar-19 09:19:28

I had a shared ownership flat in London. I was also gifted money for a deposit. In six years the rent did rise enough that while it was cheaper with the mortgage than private renting to start with, it then became just as expensive. The only good point was some of that was mortgage.

However, in that time the flat rose in value so I ended up with £60k in equity that I used to purchase my own complete house elsewhere after six years.

Well worth it in my opinion!

anniehm Fri 22-Mar-19 09:34:04

Read up on all the details of shared ownership and look for providers in your area - they will differ in terms and conditions. Most of the buying process is similar so head to a bank and get an idea of what you can borrow and crucially check your credit rating. It can work but it has lots of terms and conditions so ensure you get independent advice not "free" legal costs from a developer

LoopyLu2019 Fri 22-Mar-19 09:36:18

I'm in a SO property, bought last year. I did a hell of a lot of research before going into this. I'm in the south east where house prices are crazy high and so even though I had a deposit to use a help to buy loan, the mortgage was impossible. I would only advise shared ownership on those who are projected to be in a position to buy a whole property within 2-5 years, be it the other part of the house or a different property. The rent increase (mine is 5% this year!)Will quickly become unaffordable if your income is stretch and only keeping up with inflation. Note if you fall behind on rent then the housing association can evict you and sell the property and you are not entitled to your share by default!! I would also look at how quickly resale properties go and what % they're selling at. In my area they sell quickly because so many people cannot afford whole properties, but I would not touch SO in any other part of the country because the demand/need isn't there. Then if you want SO still, make sure it's one where you get the freehold on 100% ownership without any extra cost.

To give more context so you know why I did buy mine. I'm in a very good early career and my DP is an apprentice, both of us will have pay increases so that in 5 years we can buy a full property. We're also in the position that in 2 years we could buy else where in the country rather tha the expensice SE. We went for a big enough place that if our circumstances changed we can still afford our home and it can become our family home rather than a stepping stone.

If it wasn't for the near guaranteed career progression I wouldn't have gone for it. With this year's rent increase some families who have been in SO for 3-5 years are now forced to sell up because they cannot afford the rent.

Make sure you work out, if your salary doesn't change for 5 years, can you afford increases in rent at 5-6% each year? What about when you come to remortgage and the interest on that has gone up too?

Plan for at least 5 years and remember house prices may fall in the coming years because of brexit so are you prepared to make a loss on the property if you are out priced?

afromom Fri 22-Mar-19 09:37:17

I think so long as you are aware of the pitfalls mentioned by other posters, it can be a great way to get on the housing ladder.
DPs first house was SO. He bought 50% at first, paid 50% of £150k. Then when the market slumped and the house price dropped to £120k he took advantage and bought the second half then for £15k less. As he then owned 100% he also then owned the freehold. The price then went back up to £180k. So in all he paid £135k and sold for £180k. This meant we ended up with a really healthy deposit for our house together and we got a much bigger house than we would have done without the money he made on the SO one.
Having said that - selling it was a NIGHTMARE! Even though he owned the freehold and 100%. We had to offer it to the HA first and they took months and months to make a decision, meaning we nearly lost a private buyer in the process. HA was very awkward, didn't communicate, failed to record conversations that we had with them so we had to recover everything time and again. We ended up complaining to the CEO as we were getting nowhere. They couldn't even agree on whether we owned the freehold (which was obvious to us with absolutely no experience in property law - but apparently not as obvious to their lawyers 🙄).
On balance it was worth it, but do prepare yourself for an absolute headache if you ever want to sell.

GETTINGLIKEMYMOTHER Fri 22-Mar-19 09:45:38

If the only alternative to shared ownership is renting - with no security of tenure, possible unreasonable LLs, etc. - then I don't see what's wrong with it.
A friend of a dd bought a SO at least 10 years ago - it's worked very well for him.
At least you won't have a LL wanting you out because he's decided to sell - all that hassle of finding somewhere else, plus the extra fees/deposit to find, not to mention stress of trying to get your own deposit returned,

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