I'm looking into shared ownership housing, has anyone already done this? Talk to me please?(7 Posts)
Just wondering how often houses come up? How much is the rent for a 3 bed house if the mortgage is around 70k?
The only thing I know about them is that with some you have to sell it through one agent which is nominated by them. If you choose someone else you still pay their nominated agent about 2-5% I think, as well as the agent that has sold your house.
It depends how much of the house you own a percentage and rent a percentage, so the rent you pay depends on that.
I've done it twice. Normally for first time buyers only, but I was able to do it a second time due to the breakup of my marriage and the fact that DH2 was a first time buyer.
It really depends what area you are in as to how often houses come up. My first time was in SE London about 4-5 years ago, and there were loads of properties (some new build, some resales). Second time was in Cheshire, and there was less available.
While I think rents will differ slightly depending on which housing association your shared ownership arrangement is through, I believe it's normally something like 2-3% per year of the share you haven't purchased.
Will use my situation as an example.... if you purchase a 50% share of a house that is worth £150,000, you get a mortgage for £75,000. The part you don't own is also worth £75,000. 3% of that is £2,250 a year, or £187.50/month. 2% would work out to £125/month. In my current situation, we pay £132 in rent, so just a little over 2%.
Can't answer your question exactly without knowing what the 70k mortgage represents as far as a percentage share of the total worth, but you should be able to get an estimate using that formula above.
It's a 50% share so the house is worth £135,000, mortgage would be £67,500 so the rent would be no more than £200 a month would you say?
Do you have any idea about how much of a deposit we would need? Also solicitors fee's etc?
Deposit will depend on who the mortgage is with. The first time I did it, we didn't need a deposit. The second time (just this past autumn), we had to have 10%! Not everyone will do shared ownership mortgages (and I think they are harder to come by now), so it's not something to take to your local bank. Better off to find a broker who deals with these regularly. We used London & Country.
Solicitors fees....<runs upstairs to look at paperwork>. This last time it was around £550, but then we had to pay an additional £750 because the shared ownership lease was all screwed up and needed a ridiculous amount of work. That's not typical, it was because the original shared owners of this house bought it when the scheme was in its infancy (25 years ago). Most you'll come across will be new builds or resales of properties that are not that old.
I seem to remember the first time solicitors fees being around £800. This includes all the searches and other stuff associated with buying a property. You shouldn't have to pay any stamp duty--if that comes up, question it!
A word of advice about solicitors---again you have to make sure they are experienced with shared ownership, it can't be just any firm. The housing association will most likely have a list of solicitors they've worked with, and you should get 3 different quotes.
Don't forget to figure in moving costs!
Thanks so much for the info, I think I'll spend the next year or two saving as much as we can and then see how things are.
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