Shared ownership scheme of house purchase

[Grannypants55]

I'm just wondering if anyone has had success with buying a house through this scheme, or are you better off trying to buy 100% of the house from the outset? I've looked a brand new house under this scheme. Cost to the buyer is £96,000, £330 per month rent to the housing association, plus ground rent as retirement all leasehold. You dan buy more shares in the house after 12 months, until you have 100% share in house.
But how are you supposed to save up to buy extra shares in the house if you're paying rent as well as a small mortgage?
You also hear reports of brands new houses just thrown together these days & are not built to last. Interested to hear other opinions, thank you

Forgot to disable the voting by the way

"Plus ground rent as they're all leasehold" damn predictive text

Honestly the worst thing I ever did. Now completely trapped. Housing association are cf when it comes to service charges and useless when it comes to neighbourhood issues. Build quality is as terrible as you'd imagine. Builders offload all the crap on what they see as social housing. I'd swerve new builds all together. No privacy from neighbours- they hear everything as do we, no storage, poor parking provision. Seriously keep saving and buy outright, it may take longer but you'll be investing in your mental health.

I did it and agree with the above poster. It is definitely not a cheaper way of getting on the property ladder.
You're a tenant when it suits the housing association but an owner when it comes to any repairs/maintenance. There is no benefit at all.

Some s.o properties have ridiculous rents but others dont.
I have a s.o property, mortgage 75% and then about £100pm rent on the remaining 25%

The issue I have with buying the final 25% is that it goes off market value so worry if I leave it too long it wont be viable for me to do (value of the house has gone up £10k in 2.5 years)

We did H2B and it was the best thing we ever did! Bought it freehold and just sold it for a 30k profit. We used that money as a deposit on a larger house, the initial investment we put down was only around £7k.

I did it through a keyworker housing scheme, in London though, bought half, didn't increase my shares over time just used the comparitively cheap housing costs to enable me to continue to save and over five and a half years made a very good chunk of equity on my half. Had one open morning and received numerous offers, my half was bought by another local keyworker as they were priority properties for that. However that's London, demand is high the market perpetually rising. I was then able to buy a very nice house in a nice area outside of location and it enabled me to get onto the property ladder at 25 in London on a keyworker salary. I do have legal knowledge so had read the contract with a fine tooth comb and new exactly what I was getting into to. Not a long term option for me but an excellent first step. I can imagine in areas where property isn't as high demand and much cheaper you might struggle to sell on.

As with anything you need to do your research, not all SO schemes are the same! We have a 70% share in a house with an excellent HA who don't increase charges beyond normal inflation. Our house has been built well with excellent energy efficiency and sound proofing. The architect didn't like the small boxy rooms of a lot of new builds so we have generous rooms and high ceilings. It is a garden village so 70% green space which makes for lovely surroundings.

We couldn't have got onto the housing market for many more years if it weren't for SO. We haven't staircased yet (intend to in the next 2 years) but neighbours who have didnt need to save up any money just use the equity built up by house price increases. We have been in almost 4 years and going by other houses which have sold here our house has increased in value by about £50000.

I understand they're hard to sell.

Step away
I'm surprised it hasn't been abolished yet as it's the biggest government scam ever to try and hide the housing crisis

There was a panorama documentary on this a few weeks ago. Be very careful, do a ton of research, it can easily go very wrong. A friend of mine is stuck unable to sell due to the cladding on her flat.

Be very careful - with some schemes if you miss a payment they can repossess your property and you won't get any of your money back.

SO makes me quite nervous, is H2B an option for you?

I wouldn't at the moment OP, read up on what's happening with shared ownership at the moment. Albeit flats, not houses, but shows you just how wrong they can go and as a buyer you cam be trapped and owe thousands for something that wasnt your fault.

Help to Buy is better. We’ve bought 3 houses using that.

We bought our X authority house on a DIYSO (do it yourself shared ownership= found our own home then got the help to buy) over 20 years ago.. We had no other way of buying..so whilst now with the mortgage paid, (we still pay a few hundred a month in rent,) if we'd been able to buy outright it would have been better. .But we weren't so we live with that decision. The house value also shot up and we've never been able to buy more of a share but it's a safe house for the rest of our life with some equity to leave the DC.

The issue I have with buying the final 25% is that it goes off market value so worry if I leave it too long it wont be viable for me to do (value of the house has gone up £10k in 2.5 years)

That has happened to a family member. The flat they bought has doubled in value and they can't afford to buy more of it. Their service charges and rent keep going up, which reduces the amount they can save, and they feel really trapped.

They put it on the market a year ago, thinking they'd buy somewhere bigger outside London, and got a buyer, but then lost the buyer when they realised how much the various charges would cost them. They've had no interest since then, possibly partly due to Covid.

I thought leaseholds on houses were illegal now, I wouldn't buy a leasehold house after seeing stuff on the news. I would speak to a mortgage advisor and get some professional independent advice.

Agree with most people, be cautious and look carefully at the deal. I’m in SO, bought my 30% share for cash and pay £300/mth rent. It’s an expensive area and this is by far the cheapest housing option for me atm. And we have a modern low maintenance practical house that works well for young family. I’m saving to move to open market in a few years and am expecting to sell easily. My neighbour sold in a day same deal. So it depends. I haven’t any negative issues but did watch that recent Panorama. So check and consider all your options. Think about whether you can move on when you want to.

I wouldn't buy shared ownership unless I absolutely couldn't afford to buy anything otherwise (even if smaller/further out) and I was stuck in expensive private renting and really needed the security of somewhere to settle down. If that's your situation it might be worth considering, but no, you're unlikely to ever buy out the housing association and own it all unless you have a huge salary hike, an inheritance or acquire a partner with a good salary to help you. Be very careful with newbuild or flats (whether shared ownership or not) and get a good solicitor if you're considering either of these. Lots of problems with leasehold charges currently.

Anything with "leasehold".....RUN.

Worse than Japanese Knotweed.

We're in a S/O house but a very rare Victorian terrace, character house. No service charge, rent has increased by £20 a month in the six years we've lived here. Pay £223 rent and £368 mortgage for a three bed. Bought for £95k, now worth around £150k. Much cheaper option for us than renting which would be around £1k a month.

Not sure how easy it will be to sell, but the bonus is it's not a new build.

I would say if you can buy normally do that. However for us the choice was continuing to rent (and we had so many issues with renting) or buy with SO. Definitely the best decision for us but we were able to buy a good chunk (70%) and it is a house not a flat.

We purchased a Shared Ownership house about six years ago, purchased the maximum available - staircased to 100% ownership which included the freehold.

Originally the rent was about £300 + £500 for the mortgage. Service charge was £20 a month. Rent barely increased each year, if it did it was a couple of pounds. Service charge never increased.

We re-mortgaged and purchased 100% of the house, process was lengthy and involved a lot of paperwork but wasn't overly complicated. Our mortgage is now £600 a month so it's cheaper.

Some of our neighbours sold theirs whilst still shared ownership, one sold the same day it was listed, the other sold within four days. They go fast around here.

We now have over £50,000 in equity as well.

We have had no problems with shared ownership at all, it worked well for us.

Flats on the other hand are a bit more of a risk due to the higher service charge and potential for expensive communal repair works - but I assume that is the same for any flat, even those which aren't shared ownership