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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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:
AnonyMousee · 07/11/2018 10:14

@SaveKevin and not sure why there's is so much? We've been told our monthly payment will be around £80-£90 a month when we go over the 5 years. But I suppose it depends on the size of the property. Always best to start off small and work your way up

Felford · 07/11/2018 10:26

I'm in the process of buying a shared ownership property currently. A lot for what has been written on this thread isn't the case for me, although I appreciate different schemes have different rules.

I am buying a 50% share. I wouldn't be able to get a mortgage on the full value.

The house is valued independently (not by the housing association) and is selling for a similar price to other properties in the same street.

The cost of the mortgage and the rent on the rest is less than what I am currently paying in rent.

I am planning to staircase to 100%, this scheme enables me to at least make a start which I wouldn't be able to do otherwise.

I can make improvements to the property as I wish.

SaveKevin · 07/11/2018 10:34

There’s is a small starter home, but it’s killing them. When the 5 years was up (pregnancy, illness etc) they weren’t in a position to move and are stuck now as finances have changed for them. So their plan is to move area to clear it.
But I’d still take that over private renting.

EssentialHummus · 07/11/2018 10:35

Round my way the total values of SO flats are heavily inflated - so £420k for a flat that would otherwise sell for £300-320k. Terrible.

AntiHop · 07/11/2018 12:47

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!

Ninoo25

That's not my experience. We were in a shared ownership for 11 years. Prices went down for a short time whilst we were there (2008 crash) but overall went up. We sold our half of the flat for considerably more than what we paid, due to paying off some of the mortgage over those 11 years and house prices going up.

Yes we had to pay rent but it was less than what we would have paid on private rent. Rent rises were capped, unlike private rents. Yes we had to pay service charge, but that's the case for any ownership of a leasehold flat.

Ferne20 · 07/11/2018 13:44

Had to make an account to comment as some of the comments here are just factually incorrect.

I live and work at a housing association in the south east. I’m assuming from the prices you’ve put in your post OP you have been looking at new build shared ownership. These carry a new build premium like all newly built properties. It may be worth looking into shared ownership resales (properties being sold by an existing shared owner). The property is valued by an independent qualified surveyor, and the price is based on that value and what share the owner currently owns. If you can afford to buy more at the outset you are encouraged to do so. You can buy more shares at any time you want, and it’s based on the valuation of your home at the time you do it. The rent and service charge are reviewed each year and from my experience on the whole don’t change a lot. If you go up to 100% on a house you can in the majority of cases own the freehold. I’ve got a property at a 25% with a minimum income set of about £21000, so it just depends what type of property you’re looking at and what area. You can also carry out improvements (you just have to let the housing association know and sometimes get approval depending what you’re doing so it’s on file should you want it taken into account when you buy more shares), but otherwise you can do as you wish.

The help to buy equity loan scheme will lend you the money, then after 5 years you start paying interest on the loan (not paying off the capital). You will also pay back based on the market value at the time you pay it back/sell, so may end up paying more back.

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