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

...that Shared Ownership is a farce for low income folks

59 replies

Lifeisabeach09 · 06/11/2018 21:27

I'm on a single income of £25,000 including overtime. Single parent with one child.

I'd love to get on the property ladder. Went to see some shared ownership properties (I'm located in the SE).
One to three bedrooms ranging from 325-595,000.
I looked at a smaller two bedroom for a whopping 455,000 with 35% share in the property: £1654 per month (mortgage/rent/maintenance) and with a 5% deposit.
Apparently, I don't earn the required minimum of £40,000 per year.
What the heck?!

OP posts:

speakout · 07/11/2018 07:49

There are lots of places I can't afford to live though- the same is true for most of us.

I moved out of the city when we had kids- we wanted a bigger place and a garden, relocating was the only sensible option.

You can't insist a home appears in your price range in the location you want - life isn't like that.

I live in an area where a two bedroom terraced house with a garden in a decent area will cost £125K.

Notacluewhatthisis · 07/11/2018 07:55

Your issue is house prices in you area. Not shared ownership. So yes the only option would be move.

It's not easy. I know because I did it. When my marriage broke up, houses in my area were out of reach. So I moved. Family are further away. I didn't move the kids schools. So school run and then to work takes me over an hour on a morning and afternoon.

I got a 3 bed house for nearly 50% of what it would have been in my original area. It's not the most miserable area. But it's home security of my own home was something we needed

ShatnersWig · 07/11/2018 07:55

I looked at SO when I was buying. Did the sums. Madness. And I'm not in a particularly expensive area like the SE.

mumto2babyboys · 07/11/2018 07:59

It's just very restrictive. I looked into it before. You can't sell it you have to sell it back to the housing association.

You can't sub let it or rent a room out.

You can buy the whole lie but still can't sell it for x amount of years and you have to offer it to the housing association first.

It's a shame because some of them are in lovely areas but just too extreme in the rules I think

Unless something has changed recently?

DayManChampionOfTheSun · 07/11/2018 08:03

We looked at SO but ended up going with help to buy. Seems a much simpler way of doing things, 3 years in and we are remortgaging to cover the government loan. Couldn't recommend it highly enough!

SD1978 · 07/11/2018 08:04

It might be simplistic to say move. But it is the only option if you want to own on that income. You can't afford the area. It's frustrating. If you want to have a moan (reasonable) about that- absolutely fair enough. A solution- there isn't one. You can not afford to buy in the area you live. That's the simple breakdown.

mumto2babyboys · 07/11/2018 08:05

Op have you looked into the new Lisa scheme. Might be worth savings for a few years

mumto2babyboys · 07/11/2018 08:07

Saving! Apparently the gov adds 25%
So 4000 max you can save I think, is 5000

BarbarianMum · 07/11/2018 08:16

You can't afford to buy in your area. If you dont want to move, you need to find a partner that earns really well and wants to live with you. Or double your earning power. Those are you choices.

MrsBobtonTrent · 07/11/2018 08:19

SO is a scam. Two relatives have been shafted by it. The cost is more expensive than a mortgage or rent on the full property. Any equity is wiped out by fees, caps on selling price and restrictions when selling. Also hampered by a strong reluctance by HO to sell further equity shares, so staircasing is an expensive and long-drawn out process each time. It might solve a deposit problem, but you get none of the benefits of proper ownership.

pinkdelight · 07/11/2018 08:21

Single parent on low income can't afford to buy in the south-east. Sorry, but this should not be any surprise. I get that it sucks and that (almost) everyone wants to be on the property ladder, but the odds are stacked against you - except for the born-wealthy, the only way to own is to change area, earn more, go halves (not necessarily with partner, could be sibling or friend) and ideally get on the ladder before having kids. Your alternative would be getting on the HA or LA lists for more security. I've never considered SO as being the solution in a situation like this as it still costs a lot one way or another, as well as having all the catches.

Nutkins24 · 07/11/2018 08:30

Many shared ownerships are sadly hugely overpriced nowadays, we’ve looked recently and the monthly cost would be as much as a sizeable mortgage! My mum has one she bought a few years back that’s been great. Affordable and more stability for her than renting, thats in the sw though. I don’t think you will ever make money on SO but that’s not the idea. Believe it or not there are many people who just want a stable home, not an ‘investment’.

AntiHop · 07/11/2018 09:02

MrsBobtonTrent I had a posituve experience of shared ownership. I recently sold my flat. My rent, service charge and mortgage were much less than a mortgage on 100% of the property.

I disagree with you and helenadove that you get none of the positives of full home ownership. It gave me stability, a chance to build equity (through paying off my mortgage and house prices).

DianaPrincessOfThemyscira · 07/11/2018 09:04

I’ve got to admit, I don’t really understand shared ownership. You pay mortgage on a portion you own and rent the portion you don’t. So the same amount all in anyway .

SaveKevin · 07/11/2018 09:06

As someone in private rental there’s a lot of perks to it, you get stability, to decorate and change things, make it a proper home. You can do things in your garden, have pets.
There’s a lot to be said for that, in my rentals I’ve ended up maintaining them anyway so it’s much the same but you get the long term benefit of that improvement and maintenance.

AntiHop · 07/11/2018 09:10

*It's just very restrictive. I looked into it before. You can't sell it you have to sell it back to the housing association.

You can't sub let it or rent a room out.

You can buy the whole lie but still can't sell it for x amount of years and you have to offer it to the housing association first.*

I've never heard of a shared ownership with these rules Mumto2babyboys

I recently sold my shared ownership flat. We didn't have to sell it back to the housing association. What we had to do was market it via the housing association for 8 weeks, which meant it goes on the natural shared ownership website. If no buyer was found in those 8 weeks then we could use an estate agent. Whoever bought it had to meet the criteria for shared ownership which wasn't a problem, there were loads of people who were interested who met the criteria (there was a minimum and maximum income and had to be a first time buyer or in too small accommodation).

For those who bought 100%, they could do what they like when they sell. No restrictions. They could also rent it out of they wished.

DullBrianfromHull · 07/11/2018 09:14

I pay £490 a month for a big 2 bed new build SO in Cornwall.

We did have to find a deposit of £12,000. You still pay conveyancing fees, Stamp duty etc.

I havn't seen a 'landlord' in 3 years.

I dont know why one of the first things people say with SO, is about selling?

If I bought a house, the last thing possibly I would think is, will it sell?

If it is right for your needs at the time, its suitable.

On my wage, I would get a £90,000 mortgage offer. I couldn't buy anything.

So SO enabled me to get a smaller mortgage, in a new build & for less than £500 p/m near the beach, it suits us.

Yes, no nightlife, no big shops, but who needs that when you can watch the seals around the lighthouse

Original poster

Lifeisabeach09 · 07/11/2018 09:16

I can't move out of the area yet but am aware this is the only likely way I'll be able to buy, unfortunately.
I was just shocked by how SO is sold as an avenue for low incomes to get on the property ladder-yes, even in the SE. When clearly it is not. And this was housing association property!
Help to buy is around--I need to research it a bit more.
Thanks for the responses.

OP posts:

mumto2babyboys · 07/11/2018 09:19

@DullBrianfromHull
What do you think of nansledan?

I love Cornwall. So jealous

ShatnersWig · 07/11/2018 09:20

@AntiHop My rent, service charge and mortgage were much less than a mortgage on 100% of the property

When I looked into it (admittedly 8 years ago now), this was not the case. It was far, far more. I looked at a nice, but not in a great area, one-bed upstairs flat that was SO and another one-bed ground floor flat, nicer area, with own private large garden and a conservatory. Both on the market for £104k - obviously the former was for a share, the latter for the whole thing.

I obviously bought the latter. Monthly mortgage was £350 (I've since remortgaged and now pay £315). Monthly mortgage on the share of the SO was £250, the rent was £250 and then there was service charge on top. For someone on £20k a year, why on earth would I have done differently?

AntiHop · 07/11/2018 09:55

ShatnersWig I was in my shared ownership flat for 11 years. The costs I paid remained lower than a full mortgage for the whole time I lived there.

Ninoo25 · 07/11/2018 10:00

Shared ownership ends up more expensive in the long run and all it means is that you own say 50% of a property, but the rights and control are stacked totally in the HA’s favour. I’m speaking from personal experience do not go anywhere near shared ownership!

SaveKevin · 07/11/2018 10:05

Watch some of the help to buy schemes. I know someone who took the deposit loan out and it’s working out similar to a shared ownership.
So they are paying their mortgage and another £200/£250 a month in interest on the loan (not even paying the loan back). It’s ok if you remortgage after the interest free, but if your property hasn’t gone up or your not able to borrow the extra your stuck paying that.

Bombardier25966 · 07/11/2018 10:12

Shared ownership ends up more expensive in the long run

It didn't for me. I paid far less than what a market rent would be, and when I sold (on the first day it was marketed) made a good profit.

You need to look at the details of the individual schemes. Some are poor value, but others are excellent and without any of the restrictions some claim.

AnonyMousee · 07/11/2018 10:13

@SaveKevin you only start to pay back after the first 5 years. So you could do the 5 years, obviously paying off a mortgage payment each month, sell up at 5 years and hopefully you'd have paid off enough mortgage to pay back the help to buy loan and have enough leftover for a deposit on your next home. It's a bit of a pain but it helps you get on that ladder.

Flip

1 2 3

Swipe left for the next trending thread