Shared ownership - anyone want to talk about their experiences?

[Trills]

I THINK that if I wanted to, I could be in the position to buy a flat under a shared ownership scheme.

Has anyone else done this, or thought about doing this but then not done it? What do I need to think about? Is it a good idea?

[wowfudge]

I have a friend who has done it. In return for a brand new flat she pays mortgage and rent - she could have bought somewhere less expensive on a mortgage only basis. From what I've seen it's not a great idea. But we are in an area where housing is more affordable than, say, the South East.

[AndDeepBreath]

We did it, and sadly some ways it's the worse of both worlds ... You pay rent but you don't have the freedom that comes with renting.

We also had a sodding nightmare when it came time to sell - management company took 3 months to reject first buyer, then did the same for every buyer over the next year and a half. Ended up going to ombudsman, being able to rent it out for no profit for a while, then managed to get mortgage and buy 100% ourselves to make next sale easy. Nightmare!

However probably depends on company you're involved with (do some googling), how much you can buy, and how long you plan to live there...

[Trills]

Would the mortgage on the less expensive place be less than the mortgage + rent on the property she chose?

In the cases I've looked at the total monthly payment will be less.

[Trills]

That sounds like a shit experience with the management company AndDeepBreath - the company I'd be dealing with is a pretty big one and there's always a lot of movement in the housing market in this area so should be plenty of potential buyers.

I would say "I wouldn't want to move any time soon" but in reality you can't always know what will happen.

[wowfudge]

Yes, but she was swayed by the new place. Another flat she'd looked at was a former local authority place in a small block where I think all the flats were owner occupied.

Others in the same development have really struggled to sell.

[Elizabethreallyismissing]

I've lived in a shared ownership since 1998 it's great! It is a housing association one though not I'm not sure if that makes a difference! You have to give them 6 weeks to see if they have anyone in line to buy but after that it can go to open market. You can also buy the other half & sell on the same day if you want to sell 100%! Mines a lot bigger than most houses built at the time & my neighbours have had no problems at all selling them! I'm not going anywhere though!

[Trills]

Thanks for the happy story :)

Fairly certain that if I were to re-sell it would have to be to someone who "qualified", but I don't think there would be a huge lack of them.

[JimmyGreavesMoustache]

Not shared ownership, but I previously owned a leasehold flat in a very small block of six and the management company were horrific to deal with at the best of times, and worse when selling. Put me off buying leasehold again, and I think similar issues would crop up with shared ownership.

[SimLondon]

Would you possibly be in a position to buy a cheaper place through the usual route? have you spoke to an independent WOM mortgage broker?

I think you should at least get some independent professional advice and make a list of the pros/cons of both.

[fiorentina]

I have a positive experience of shared ownership in the South east via a housing association. Owned 60% and rented 40% at a v reasonable rent. Sold on via their waiting list and made a decent profit. Nothing really negative to say.

[Trills]

I could possibly buy somewhere smaller, in a less nice area, with a longer commute.

Smaller = I'd be much more likely to want to move again.

Longer commute = I'd have to spend more money (as well as time) commuting, and generally find it harder to get home after doing social things.

[SingSongSlummy]

We bought our first flat in London through Shared Ownership (started at 40% and went up to 80%) and it was the only way for us to get on the property ladder at the time. It was excellent for us and enabled us to build up some equity and buy our own place when we sold the flat. It was a bit of a pain to sell in that the valuation from the company came in suspiciously low, so I went out and got four independent valuations and forced them to increase the asking price substantially. They had a month to find a buyer, which they didn't manage and we went to the Shared Ownership section at Foxtons who had 5 offers at asking price within a week. Do it!!

[AndDeepBreath]

Hopefully then it wouldn't be a problem for you! Do some research on Zoopla and RightMove etc about the listing length of the place you're interested in. If it's very long, ask the EA why and if you'll have that difficulty. Ask the shared ownership team how long they take to process sales requests too and what their policies around renting it out are if you needed to move

[RedBlu]

We bought our Shared Ownership house last year. For us, it enabled us to get on the property ladder.

Some people don't seem to like the idea of shared ownership but we intend to staircase to full ownership in a couple of years, which is obviously the purpose of shared ownership.

We can do whatever we want to the house, only things we can't do is structural stuff. You are responsible for all repairs, as you are treated like a normal homeowner, but this doesn't bother us.

Some people claim that S/O properties have over inflated prices but I haven't found this to be the case at all.

We purchased the largest percentage available so our rent isn't much, obviously it can go up each year but it's capped so they can't suddenly increase it massively.

With our house, we had to apply for shared ownership and ended up completing against forty five other people, that is how popular S/O around here, so I have no worries that if we ever had to sell, we would sell it fast.

[blueteapot]

Sil did shared ownership, in order to afford a newer home. They have no intention of moving from it so happy with the difficult resale factor. The only prob i can see is that when you come to want buy further chunks they are priced at current market value not a proportion of the price you originally bought at. Dealbreaker for me as Id want to own the whole place by retirement

[Kernowgal]

I got put off because the rental portions always seemed incredibly high, much more than a full mortgage on a similar place (plus service charges etc). I think it depends on where you are though - down here in Cornwall it seems a very expensive way to get on the ladder.

There are other options such as shared equity (where you buy say 75% of a property and the HA owns the other 25%, and that's what you sell on when you move), or a Section 106 discounted sale, but this usually requires local connections such as having lived in that area for at least the past three years.

That said, I have a friend who's a housing solicitor, working with people being repossessed or facing eviction and the like, and he said he wouldn't touch shared ownership with a bargepole.

There is also the issue that if you are repossessed, you still have to pay the rent on the place until it sells, which could take a long time depending on where you are. I think this is the case anyway, but correct me if I'm wrong!