To think shared home ownership sounds dodgy?

[littleSpud]

We rent a council house ATM but Looking to buy our own home. we can only afford the repayments on about 90k, tops

We live in an area houses are "cheap" however all that's available under 100k is either absolute shitholes or lovely shiny new builds for 50-75% shared ownership

But Aibu to think this shared ownership thing sounds dodgy as fuck? Like what happens at the end of your mortgage when you still owe half the value of the house? Do you just get kicked out? Plus they seem overpriced

The criteria is really hard, makes the new mortgage rules look simple. We had to account for every penny we spend as part of the SO process. I'm still glad I did it but wouldn't necessarily recommend it, you have to have your eyes wide open.

Is it true that all shared ownership houses are leasehold? I was looking into it recently and (after a LOT of thought) decided to just keep saving to hopefully buy normally at some point.

I work in shared ownership properties and I think it's a fantastic idea, but it really pays to comb through the lease and Ts and Cs before purchasing. It sounds really obvious but the (potential, at least) of an SO property - cheaper monthly outgoings, actual control of the property (as opposed to renting) and the potential to get the whole house at a much better rate through staircasing - is counteracted, to a point, by fairly stringent restrictions on renting and selling. I deal with a lot of people who are understandably confused or put out by the processes we (legally) have to go through to sell, for example, but ultimately it is a choice buyers need to make when they are weighing up the pros and cons.

In answer to the AIBU, I suppose I would argue a bit of both - dodgy is definitely not the word I would use, but different from owning your own property outright? Absolutely.

pardon, the properties I work with are leasehold - we have headleases of hundreds of years, and will always extend a lease for an individual client.

RE stringent financial rules, they are there in all fairness to make sure that the properties are bought by those who can benefit most; what I really find frustrating is when you come across people who stash their money offshore, for example, apply for the house and then staircase to full ownership within months of housing (the prices of our houses are kept down, even when staircasing). It strikes me as so unfair!

Don't do it!

Me and Dh took on a 50% shared ownership housing association flat in October 1989...just before the big financial crash! We were in huge negative equity for 10 years,but every year the rent went up,and the mortgage kept creeping up,then we had a letter from the HA saying they were going to fix the flat roofs on each block of flats and we needed to stump up well over £1000 - that was EACH flat...we were on the ground floor!

Eventually,we were able to sell our share,just as the housing market for flats in Herts went stratospheric...but it was 13 years after we first moved there and we had 3 children by this time. We couldn't afford anywhere in the area and had to move 250 miles to Yorkshire where we were able to buy almost outright.

I don't think shared ownership is a good thing at all...too much worry and uncertainty, unless you think your earning power will rise quite quickly and you can afford to buy out your rented share after a short time.

Thanks for the replies its made interesting reading

Our council house is an assured tenancy and cheap rent but I don't want to assume that will always be the case (I don't trust this govt as far as I could throw it!)

I also worry that if I gave up my council tenancy (which is on my name alone) we bought a house then dh and I broke up (hope this wouldn't happen but being realistic) we'd both be fucked as we'd be both back in private rented

Re buying our council house yes this is an option and our house is lovely, but we live in a shithole area and I worry about the dcs growing up round here tbh. And also I would feel bad for taking yet another council house out of the system iyswim

It's worth keeping your eyes open for different forms of affordable housing too. We're in a 100% ownership freehold property, but it can only ever be bought and sold for 56% of market value at the time and through a HA who have to pick the next buyers too. It's been amazing for us, and I don't know why more affordable housing isn't done on this model.

Think very carefully about what you want, op. I wouldn't trust this government either, but a secure tenancy and cheap rent is not to be sniffed at, even in a dodgy area. And yes, if you give it up to buy and split up/ lose jobs/ get sick/ can't afford your mortgage when interest rates go up you will be in trouble and stuck in private renting at double the cost. You also can't phone the HA when the boiler needs fixing/ roof needs replacing.

Lots of HAs seem to regard their leaseholders as cash cows too, which is an issue when buying shared ownership/ ex council properties.

Could you do a council exchange to an area you prefer and then buy the home in the new area under the right to buy scheme? You'd keep your accrued discount from your current tenancy.

That way you could end up with a property you can afford that you own 100% of. The only restriction would be that if you sell within the first decade you'd have to pay back your share.

The local council will tell you how to sign up for the homeswap scheme.

My previous landlady had a SO flat. All the other flats in the block got new windows and kitchens except mine despite her only owning 25%

She also got hit with a lot of bills she didn't expect. anything that was done to the building was divided by 6 and she was expected to pay the full 1/6 relating to her flat. soon as I gave up my lease she sold back to the Housing association

See I wouldn't be bothered about selling it I don't think

I basically want a home for me dh and the dc for life, that we can afford the repayments on. not an investment or a way to get on the property ladder

20 years ago my MIL and FIL bought the then newly built bungalow they retired to.

They owned 85% of it outright and the builder retained a 15% stake on which no rent was payable. This enabled MIL and FIL to buy without needing a mortgage, which made perfect sense at their age.

FIL died in 2002, and MIL in May this year. In accordance with both of their wills, we are now selling the property to split the proceeds between her three children. We have had no difficulty finding a buyer so far, and have fingers crossed for all going through smoothly over the next few weeks. The new owner is buying 100% ownership outright, as I understand it.

All that the shared ownership has meant for us is that when the sale goes through the conveyancing solicitor will siphon 15% of the proceeds off and pay it to the builder. The only other costs to come off are MIL's funeral expenses and then the usual solicitor's and agent's fees, so there will still be a good profit.

All is in the small print. Read it carefully. If you pay off your mortgage you just continue to pay rent on the other share of the property, if rent was part of the original agreement. You are not evicted unless you start defaulting on payments.

Thanks for your story topsy