Active discussions

Meet the Other Phone. Protection built in.

Meet the Other Phone.
Protection built in.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

What do you think to part buy schemes in London?

63 replies

EachandEveryone · 30/03/2018 21:30

I don’t own. I’ve inherited 30,000 but won’t be getting it for awhile. I work in London but eventually will move back up north. They are building flats all around me, thousands of them. They are saying they are worth £450 plus but they aren’t. So, 125 grand will buy a person a quarter plus they charge £450 rent and £150 service charge. Totally it will be about £1300 a month. Is this kind of thing ever worth it? My rent on a three bedroom is £1300 and I share.

OP posts:
UpstartCrow · 30/03/2018 21:32

I think it depends which part of London, in some areas there are a lot of foreign investors buying flats as an investment.

Original poster
EachandEveryone · 30/03/2018 21:42

I doubt they would be entitled though as it’s key workers etc

OP posts:
UpstartCrow · 30/03/2018 21:45

No, I'm not saying investors will buy these flats. I'm saying in some parts of London it would be considered an investment. So it just depends if you can afford to tie up the money or not.

Original poster
EachandEveryone · 30/03/2018 21:56

What’s the chances of them selling on ok though? There are literally thousands going up

OP posts:
hibbledibble · 30/03/2018 21:58

Part buys sell very well in London, as so many people can't afford to buy outright.

Incidentally, 1300/month for a new build is very cheap, and you will be gaining equity. If you were privately renting the same property you would be paying more.

FellOutOfBed2wice · 30/03/2018 22:01

I wouldn’t personally- it’s a lot of money each month for a quarter of a flat. I think the help to buy in London (40%) is a better bet and you own all the of the property and will be paying less per month.

We brought a £400k new built in a London borough last year with just an £18k deposit. Our mortgage is £700 a month and once we start paying the HtB back in four years our monthly expenses will go up to £850 a month. Still much cheaper than £1300 a month to own a quarter of something.

Fruitcorner123 · 30/03/2018 22:04

My friend bought one of these about 8 years ago and has made loads. I think it has doubled in value. Don't worry about how many they are building. Building is not keeping up with demand so that won't be an issue.

It does depend in the area though

Fruitcorner123 · 30/03/2018 22:07

FellOutOfBed2wice

That is an amazing deal for London. I am guessing that OPs area is different. The figure OP described are much more typical.

Cheeseislife · 30/03/2018 22:10

Fruitcorner stats are if they stopped building flats in London now it would take 3 years IIRC to sell every one currently on the market. And there are around 600 developments in planning in London for high rises, so I'd hardly say demand won't be an issue going forward as it could be - lack of demand that is!

HateTheDF · 30/03/2018 22:11

I've been thinking the same OP, I've just inherited exactly the same amount and what you're looking at price wise is the same I would have to pay for the London Borough I'm currently in.

I know someone who did it, they got a flat a couple of years ago and sold it this year and now have a mortgage on 3 bedroom place in London which they fully own.

hibbledibble · 30/03/2018 22:11

cheese if there wasn't demand, then the prices of these new build developments wouldn't be so high.

PickleFish · 30/03/2018 22:12

felloutofbed2wice
sounds like an amazing deal. I've got about 30% of a flat worth less than that, and my mortgage, plus rent, plus service charge is still over £1000 a month, not in London either!! And my deposit was many times yours. I think we are being massively overcharged on the service charge etc, but again, not much I can do about it.

I didn't have much choice. I know a couple of people in my estate are trying to sell currently, but haven't yet - about 2 months later - but there are a lot of new build shared-ownership schemes being built near me.

I am slightly better off than I would be with private rent, though, so I'm holding on to that. And have no expectation of needing to move in the near future, either - I think that makes a big difference. If you are seeing it just as short-term investment, it might not be worth it, as it can take quite some time to sell

Fruitcorner123 · 30/03/2018 22:13

Ok so its lack of affordable housing thats the problem.. In london though most new flats are worth more than £450k so not sure that stat applies to small lower price(for london) flats. However I clearly don't know its just based on anecdotal evidence.

Cheeseislife · 30/03/2018 22:15

Fellout you say you own all of the property, but don't you have the 40% HTB loan at a guess? So you own 60%, except for the bank owns 55% until you pay the mortgage off in I'm guessing 25+ years.

OP I'd strongly recommend you don't sink your inheritance on a quarter of a quarter share of an overpriced flat in a sluggish/regressive market especially when you don't intend to even stay in London long term.

Original poster
EachandEveryone · 30/03/2018 22:16

But I’m
Only in an area that is going to take a while to be up and coming these new flats are ona council estate which they have practically demolished. Where do these people get rehoused? What kind of a crowd can I expect to
Be in my block of flats and what happens if people stop paying the service charges? It makes me nervous. Eventually it will be nice I’m sure but at the moment there’s jardly any facilities. It’s zone 5.

OP posts:
Original poster
EachandEveryone · 30/03/2018 22:18

I’ve found out that my current flats leasehold runs out in 7 years and that’s the same with the whole street. It will all go back to the council even though a lot of it is listed I’m assuming at that point the the council will knock it down. Does anyone know what happens to tenents that are renting privately in this case? Do we just all get asked to leave?

OP posts:
FellOutOfBed2wice · 31/03/2018 08:12

Fruitcorner123 we had an amazing (and eye wateringly expensive!) broker who got us a great mortgage and I know that £400k is relatively cheap for some areas of London (let’s just say that this isn’t the most fashionable of boroughs 😆) but don’t forget Help to Buy will lend you 40% of the price which acts as a deposit. So in reality we had a circa £28k deposit.... which is still only 7% but it was enough to get the mortgage —which we will be paying off until we are 150–

FellOutOfBed2wice · 31/03/2018 08:18

Yes Cheeseislife you’re right about those percentages but nevertheless it’s still better than only owning a quarter of it and it’s not really any different to owe money to HtB than it is to owe money to a bank on a mortgage. Better really as their rate of interest is so low.

I’m not saying it’s a perfect solution by any means but it was a way of us getting on the ladder when we otherwise really wouldn’t have. We would have been looking at a £40k+ deposit and despite having good, well paid jobs we’ve got two young kids and were in our 30s. It was grasp the nettle time for us- and it was a bloody palarva but we’ve been here a couple of years now and I’m glad we put ourselves through the stress of doing it.

DeadGood · 31/03/2018 08:18

I’d go for it OP, unless you plan on moving out of the area, which it sounds like you aren’t. Your current flat is on uncertain ground, and your expenses wouldn’t go up on the new place. It can be a springboard to other places - simply having a mortgage in the first place will make it much easier to get one (or extend/increase the amount for a new place) in the future.

Good luck!

SoozC · 31/03/2018 08:35

I had a part buy flat in SE London - 2 beds, total rent and mortgage a month went from £850 six years ago to £1100 just before I sold last year. Its value increased by 50% so I now have a good chunk of money to put towards another property. So it worked for me, I guess.

Original poster
EachandEveryone · 31/03/2018 09:15

Ive just seen flats a stones throw from Hampstead health for £450,000 so i cant get my head around builders saying these boxes in the sky are worth that.

OP posts:
Spoog1971xx · 31/03/2018 09:20

OMG OP I can rant on all day about this. We are currently taking the housing association to court ( the entire development) it's at worse financial suicide and at best a living hell- don't do it
Obviously I can't discuss the case here but PM and I can tell you every thing about shared ownership in London

LaurieMarlow · 31/03/2018 09:28

We did it. The sums were similar to yours. It worked out extremely well for us. Selling was easy, lots of demand and we made a lot on it (didn't quite double in value, but close enough).

However we bought in 2011 and sold in 2016 (pre brexit).

Paying rent was a bit annoying, but we saw it as a levy for living in a very nice part of London.

Original poster
EachandEveryone · 31/03/2018 09:47

You see this isnt a nice part of London. It never will be hipster. Its rough and soulless. The local shops are the usual Asda and Poundland. They cant give it character.

OP posts:
hibbledibble · 31/03/2018 10:04

each anywhere not nice in London is now ripe for regeneration. It's the best places to buy.