Please or to access all these features

Add post

Watch this thread

Save thread

Start a new thread

Flip thread

Hide thread

My feed

Active Unanswered threads

Getting started FAQ's

Unanswered threads Acronyms Talk guidelines

Hide shortcut buttons

Talk

AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Flip

1 2 3

Original poster

To think part ownership is a con

55 replies

BumpowderSneezeonAndSnot · 15/01/2018 20:07

I'll start by saying I'm not a homeowner.

Surely something is only worth what someone is willing to and is able to pay. So if people are only able to pay for £140k of the £260k asking price surely the property is only worth £140k? But no! There is money to be scammed here...so let's make people pay rent on top of their mortgage even though they will never own that % of the property!

It smacks as one big con to me.

OP posts:

TheRebel · 15/01/2018 20:08

Exactly why we didn’t go for it, I imagine it’s quite difficult to sell on too.

wibblywobblyfish · 15/01/2018 20:09

I looked into it briefly. Seemed like all the downsides of ownership with none of the benefits of renting.

Original poster

BumpowderSneezeonAndSnot · 15/01/2018 20:13

Yes how is that allowed to happen? You own 25% of the property but have to pay 100% of the maintenance and the landlord does nothing to maintain the property.

It's the biggest scam going!

OP posts:

HarrietKettleWasHere · 15/01/2018 20:13

I'm starting to think it might be our only option.

We are 32, fairly good wage earners but we're in London. Even moving to the very edge, no way we'd be able to raise the deposit to buy. No chance of parental help.

We might have a chance at shared ownership, although I'm not convinced it's a good thing.

SoyUnPerdedor2 · 15/01/2018 20:14

Ah. The affordable housing thing...
I work for government in a well paid, secure job. Been in my job nearly 20 years.
Applied for one of the new-builds in our village on the part ownership thing.
I couldn't afford the affordable houses!
These were the smallest 3 bed shoe boxes with tiny gardens. Nothing special.

So how does anyone else afford it?
Anybody on minimum wage will have around half my income (which shows my pay isn't brilliant, but not bad.)

shakemysilliesout · 15/01/2018 20:15

Everyone's getting a piece of the pie, you have to use their EA, their plumber etc, management company, they have the freehold.

abbsisspartacus · 15/01/2018 20:16

From my understanding you buy half the property they then offer you the opportunity to buy the rest they still have obligations about upkeep and maintenance of the property

MrTrebus · 15/01/2018 20:17

Clearly you know nothing about it, it is a massively viable and profitable option for a lot of people who can only afford to buy the share but need a 3 bed house instead of a flat for example. You borrow further on your mortgage over time to buy further shares (reducing the rent) and the rent is really minimal anyway. Eventually you own the whole house and stay or move on. Yes they're hard to sell on if you still only own a share rather than the whole house but then it's best not to buy on a shared ownership basis in the first place if that's your plan. It works for people that bed a certain size place that they couldn't get a mortgage for based on full market value, intend to stay for a longish period and can afford the rent and mortgage together. Simples.

Talkingfrog · 15/01/2018 20:17

My first house was shared ownership. The house was valued normally, and then I paid 50%of the valuation for my 50%share. Paid a low rent on the rest. When I sold the same happened as the buyer was only buying my share. The half owned by the housing association never changed ownership.
It enabled my to buy my first house in the village I was born in, instead of having to move to the other side of town.
I sold to a first time buyer whose parents lived two streets away.
The increase in value during the 8 years I was there (around 2000 to 2008) gave the deposit for our next house.
The only thing that seems unfair is when people pay to improve, and it then puts the price up if they want to buy more of the property, or people being responsible for the maintenance if they only own 25%.
There are lots of different types of shared ownership scheme now though.

HardAsSnails · 15/01/2018 20:17

I think it's a fabulous concept and a good way to gain more stability than in private rental. I think it works best when people intend to remain in the property for a longer time as the admin around resale can be a PITA.

Kpo58 · 15/01/2018 20:19

Affordable housing is also a con. It just means that it cannot cost more than a certain % of the houses in the area.

If the local houses all cost 3 mil and in this example affordable housing cannot be more than 66% of the average house prices, then affordable homes would be costing 2 mil. That still doesn't make them actually affordable in the real world.

AntiHop · 15/01/2018 20:19

It's not a scam.

I'm in a shared ownership flat and it's worked for me. It means I have the security of my own home. It means I can decorate it how I want. It means that I'm paying off the capital on a mortgage and building equity.

I couldn't have done any of that if I'd been private renting.

Yes there's a service charge, but that's the same in any flat, not just shared ownership.

Now that I've built up equity, I'm able to move on to a non shared ownership home, which I'm in the process of doing now.

Gabs55555555 · 15/01/2018 20:19

I do agree.
However, it was the only way I could get my foot on the ladder 10years ago, And without the money I made (c50k) We would never have been able to buy the house we are very happy in now. I do think we were pretty lucky with the timings of when we bought/sold though.

nogooddeedgoesunpunished · 15/01/2018 20:20

That's interesting. My first mortgage was on a shared ownership property and the 50% share I bought cost me exactly half the market value. I then paid rent for the remainder at less than 50% of it's rental value. When I came to sell on it went to competitive bidding as it allowed the new owners to purchase a property as I had ( essentially buying a house they couldn't otherwise afford). I got 50% of the equity along with a 'bonus' share for the value I had added over the years. I would recommend it for first time buyers but acknowledge it might not be everyone's cup of tea. It can take longer to complete on sales as you have 3 lots of solicitors to wrangle with but for me it was worth it. Some people have a problem with being responsible for repairs etc but it helped me get a leg up the property ladder when I needed it.

AntiHop · 15/01/2018 20:23

hard admin of resale isn't that much of a pain. Doing it now. In fact it seems less stressful than selling on the open market as the price is fixed by a surveyor, so there's no drama around competing offers etc. Plus you have to register for the shared ownership scheme before viewing, so there's no nosy timewasters coming for viewings.

rollingonariver · 15/01/2018 20:25

I think it's a great idea. I wouldn't be able to afford the deposit on somewhere that wasn't part ownership, the rent is also cheaper than standard rent and the association that owns the other 'half' does usually do maintenance. You're allowed to decorate like you can't in a standard rental, I actually think it's a pretty great idea and you can keep upping the percentage you own until you own the whole house. They sell like hot cakes and then with any money you've managed to put into the house (other than rent money) you can buy a 'better' house rather than wasting all of that money on rent.
I'm really sorry this is horribly written I'm half asleep but I'm sure you get the idea.

Madonnasmum · 15/01/2018 20:26

If the 260 price is comparable to similar properties in the area, then the price is correct. The 140 mortgage (50% = 130 ) allows those who'd never be able to borrow enough for 260 normally.
Which bit don't you get?
I did it, started at 25% and staircased up to 100% over the years. Sold it on the open market, no issues.
It got me on the housing ladder as a single person earning 8k a year.
Can't recommend it enough!

Original poster

BumpowderSneezeonAndSnot · 15/01/2018 20:26

Do you not think it keeps house prices higher than they need to be? If 8 flats are shared ownership doesn't that show you those 8 flats are overpriced?

OP posts:

grannytomine · 15/01/2018 20:28

I know a couple of people this didn't work for but I know one couple who bought 50% of a house, couple of years later they bought another 25% and eventually owned the whole house. Their mortgage is paid off now and they have a nice house, neither of them were big earners and they were living in a maisonette in a not great area when they moved to the house so it did work for them. It was 30 years ago so don't know if it work as well now.

tiredbutFESTIVE · 15/01/2018 20:35

It worked for me. It costs less per month than renting similar, it’s mine to do with as I like, and when I sell I will make a %profit (London).
I will be able to buy out of London with the profit.
Out of London it can be harder as there’s less choice/people interested in shared ownership in my experience.

Madonnasmum · 15/01/2018 20:43

@BumpowderSneezeonAndSnot

The price is the open market valuation, so they are not overpriced. The whole point is you buy the % you can afford.

If someone can afford a 140 house why would they spend 140 and rent? It's because they are getting a property worth 260.
So this allows people a larger property than they can get on the open market.

It's not a 'cheap' way to buy a house, mortgage and rent is comparable to the equivalent 100% mortgage in some cases. it just helps people buy a property for more than a mortgage company will lend.

InspMorse · 15/01/2018 20:57

New homes for sale near here 600k+ 'Government' help to buy scheme knocks off 100K or so (can't remember actual amount. The houses are worth the knockdown price & no more compared to others in the area. Housebuilders are inflating their asking price. It's a con.

InspMorse · 15/01/2018 21:02

MrsDoyleFallingOutTheWindow · 15/01/2018 21:13

It always seems really expensive to me - the only ones available near us are relatively newly built so overpriced anyway. And unless your income increases you'll always be paying rent. Forever.

TittyGolightly · 15/01/2018 21:14

Mine set me up for life. My sister’s has enabled her to buy a million pound house in London. If you’re smart they can work very well.

Flip

1 2 3