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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

To consider shared ownership?

35 replies

YouHaveAnArse · 16/05/2023 15:30

DH and I have been renting a flat in London for about ten years now. Our rent is cheap, our landlady (manages it directly) is decent and is likely to let us stay next year too, but the horror stories about the rental market in London are worrying me a lot. There is a flat in our building up for rent for 50% more per month than we pay. As it is, I already find myself panicking a lot about what if the rent goes up and we have to move, what if we can't afford it, what happens next, can we plan anything more than a year in advance etc. - autism and anxiety are brilliant, huh? - but things seem to be getting worse. I don't want to engage in rounds of interviews or estate agent bidding wars to have a place to live. We are in our 40s and I don't have time for any of that bullshit. And at some point, our landlady will sell/put the rent up to a point we can't manage, and we will have to deal with it. I've been dealing with some financial and medical stuff for the past few years, and this is now coming into an end and things are looking more likely in terms of getting a place of our own in the next year or so, but still feels impossible given the way things have been save a massive property crash.

Buying outright in London with our salaries/savings looks unlikely. So we have the choice of carrying on renting, considering moving out of London (I'm open to this, and have colleagues who commute in from other cities, but I'm concerned about the costs and unreliability of trains etc. over time) or shared ownership. When I look into the latter, I worry that a) the costs of rent and service charges will still be unpredictable b) the process for increasing our share looks like a massive pain c) it's still leasehold (though realistically anywhere we can afford would be the same) which seems like a massive scam d) the flats seem wildly overpriced at market value, even if the flats that would be in the same price range to buy outright all seem to be aimed at cash buyers/investors only because of lease extensions and such.

On the other hand, if we are childfree and are looking to buy as a place for us to have a stable home to live in medium to long term and not as some kind of investment vehicle, would it not give us that, thinking of it as more of a long term secure rental? And also that it would prevent DH being separated from friends, starting again elsewhere etc. Is it worth considering or, given the choice, would you look at moving to eg. a seaside town nearish to London, or a different city with a view to a once a week commute? I feel I need some kind of realistic plan to work towards to stop me worrying so much!

(We both do quite specific jobs, for the purposes of weighing up the options let's assume that and our places of employment will not change long term; trying to be practical and NOT anxious about this by looking at the situation as it is, and trying not to be annoyed that two professionals in their 40s can only realistically afford 1/4 to 1/3 of a small flat in Croydon and if that's the case then what about people who do real jobs etc)

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YouHaveAnArse · 16/05/2023 15:33

I didn't want a poll on this thread, please feel free NOT to vote, cheers thanks

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TaraRhu · 16/05/2023 15:51

The London conundrum! It's so tricky. I have a few friends Thad did shared ownership and it's worked out well. Over time they've been able to up their share and that's when it stops feeling like a con. You can also reduce your share if needed which can be useful.

My two suggestions are

  1. Have you looked at shared ownership resells? These seem to be a bit cheaper and come with slightly lower service charges. In the part blocks were lower rise and simpler in design.
  1. Have you considered buying ex local authorities stock? Our old flat was a 2 bed flat in a beautiful street in sw London and it was half the price of our neighbours. It had bags of storage and a garden. We made about a 20% return on it over 5 years. This allowed us to buy our current house which is not ex local. There were some issues with one neighbour but most of the block were lovely. It was cleaned every week and well maintained. Plus we got to live somewhere nice that we could never have afforded otherwise. It gets you on the ladder.
frankgu · 16/05/2023 15:53

What's your budget?

catchthedog · 16/05/2023 15:57

I love shared ownership and its how I got on the ladder myself. I also work in building them for housing associations so know a lot about them.
I've always found it really easy to staircase, the new model of Shared ownership means that the leases are huge anyway and you won't have to worry about extending. You can also add additional tiny shares with cash purchases as and when you fancy (this is new builds only not resales).
Houses are a more simple than flats if you could find one of them as there's limited service charges or sinking funds to have to think about.

Nordicrain · 16/05/2023 15:57

People are so snobbish about shared ownership, and I don't get why. They are a perfectly acceptable and sensible option for some people, and can really help you get onto the ladder. Especailly in London. I know several people who had a shared ownership in London which allowed them to buy a house in the home counties afterwards, so a ladder entry so to speak.

You should make sure you know exactly what your rights and obligations are though, and the impact of the set up should you want to sell.

YouHaveAnArse · 16/05/2023 16:01

Budget - hard to say until we can actually speak to a broker or whathaveyou. A MIP suggested we could borrow enough to buy a flat in the area where we live (regular, not shared ownership) but it's hard to know for sure until we apply and they look at our finances properly. We have about £30k saved between us right now and should be able to increase that a little with careful saving over the next year, but it depends how tight banks are being. The MIP suggested we;d be lent £300k, but I did this before the CoL crisis so that may have changed.

I have looked at resells, these might be the better option - just want to understand if they really are something not to be touched with a bargepole generally!!

I'm not looking to buy somewhere to 'get on the ladder' or as an investment, though. I want to move somewhere that I won't get told to leave by a landlord with two months' notice. Obviously we may want to move ourselves at some point, and I don't want to be in negative equity, but I just want somewhere stable to live.

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Sprinkles211 · 16/05/2023 16:03

We have shared ownership and I wish to God we looked into it better. Mortgage companies do not like shared ownership mortgages, rates are alot higher as its a bigger risk they cannot repossess as someone else also owns a stake. We were backed into a corner and had to get a variable rate high interest mortgage took at that point at 5.2% it's now at 12% and we also have to pay rent and service charges on the property. Which have gone up every year. Selling our portion could take considerably longer than a normal sale as they have to be accepted by the landlord aswell as mortgage provider. Thankfully our only saving grace is that we can own 100% of our property we just need to save up again for a further deposit to get a full mortgage but we are paying out double what we would of had we just bought a house outright each month. Any repairs have to be done by yourselves despite being a renter and if you buy a newbuild straight from builder with shared ownership they treat you like 2nd class citizens and only talk to the landlord, the landlord then sends you back to them saying its our house our problem so your piggy in the middle begging for help when anything goes wrong that should be covered under new house warranty. We were given the false impression shared ownership would give us security and our own home when actually your in limbo no one wants to touch you or help you unless you own the whole thing.

YouHaveAnArse · 16/05/2023 16:03

Nordicrain - yes, that's the bit I'm worried about, how restrictive it might be if that has to happen.

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WedTheBed · 16/05/2023 16:04

We did shared ownership. It’s been fine. Was easy to navigate the process. We only did it 6 months ago and we can only purchase shares 4 times, so there’s only 4 time we can ‘stair case’ to own 100%. Someone above mentioned buying tiny shares all the time as and when.. but that isn’t the case for us so just be careful with that information and make sure you know how many times you can purchase more property, as you might get stung and not be able to buy the full property if you max out.

frankgu · 16/05/2023 16:05

People are so snobbish about shared ownership, and I don't get why.

I know people who they have worked for & others where it's been a bit of disaster. Many do have inflated prices.

frankgu · 16/05/2023 16:06

@YouHaveAnArse personally if you can buy a non shared ownership i would do that. You sound like you have a deposit, many people find that the difficult bit.

YouHaveAnArse · 16/05/2023 16:06

Sprinkles - thanks, that's useful to know! As far as I can see leaseholds can be a bit like that as well - you might own the flat but there are still restrictions on what you can do to some extent, such as flooring or pet ownership, and the costs can rise - but you wouldn;t have been able to buy outright otherwise, right?

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YouHaveAnArse · 16/05/2023 16:08

@frankgu Probably not enough of one, though! There's no inheritance/family help to boost it, we're limited to what we can save.

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frankgu · 16/05/2023 16:08

@Sprinkles211 yes some friends have been stung remortgaging & by service charges.

frankgu · 16/05/2023 16:09

If you have 10% that's ok

YouHaveAnArse · 16/05/2023 16:09

(Just saying to be clear that we can't exercise that as an option to give us more choice in things - that's how you end up with the choice between long-term renting and things that are like buying a house but not really :)

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frankgu · 16/05/2023 16:11

I get that, I don't know anyone including myself who bought without help. Plenty I know got more help to move up the ladder.

Lcb123 · 16/05/2023 16:12

We had a flat in West Norwood (zone 3), sold last year for £315k. With your deposit and borrowing you could afford that in full. It was in a council block but a big flat with lots of light. I’d probably shop around within London first and consider shared ownership as last resort

frankgu · 16/05/2023 16:12

A 300k budget with a 10% deposit does give you some options though. What areas are you interested in?

frankgu · 16/05/2023 16:14

It's not hip but 300k would get you a flat in places like Sutton or Norwood.

Sprinkles211 · 16/05/2023 16:18

We would of been able to buy properly we were half way to decent deposit when our landlord needed the house back urgently and there was absolutely nothing we could of rented without moving our childrens schools one is in specialist schools due to severe disabilities so really didn't have time to think about it just believed the hype of its a step on the property ladder which it is ish lol like I said if you know you can buy 100% your an owner we literally feel trapped now and for us we've always privately rented this is our first experience with a social housing provider and my god the rest of the world looks down on you, we are treated as though we are stupid and bottom of the shoe dirt by anyone we've had to deal with about the house. We went from feeling quite proud of ourselves for navigating awful circumstances to buying "our first home" to feeling very ashamed that we have a shared ownership home. We only qualified for it due to me being home full time as a carer to our disabled child do just my partners wage coming in I'm training to be an accountant to get us out of our situation as fast as I can and buy them out

TaraRhu · 16/05/2023 18:07

frankgu · 16/05/2023 16:14

It's not hip but 300k would get you a flat in places like Sutton or Norwood.

Yes, or Crystal Palace which actually is at least partly cool!

blablabla123 · 16/05/2023 18:12

Please avoid A2dominion/Ballymore - they doubled our service charge to £500 monthly and keeps increasing every six months and we cannot do anything about it...
Also beware when you sell you pay a 1% fee of the TOTAL value of the flat rather than the part you own.
Flip side is a great looking flat which would cost double to rent.

AmeliaWarnerBros · 16/05/2023 18:39

@YouHaveAnArse , go for it!
I'm in a similar position (single but in South East & sans property!). I've realised that I simply can't go elsewhere (everyone says "go up north' etc!) but I would honestly own 1/4 of a lovely flat in/near London than a house outright in Bury or somewhere I don't know anyone & may struggle to sell in the future.

Before anyone tells me I'm horrid for saying this about Bury, I have nothing against it. As a house-sitter I've had the opportunity to live all over the UK & realised I'd choose to stay in one area with the compromise of a smaller/shared ownership property.

YouHaveAnArse · 16/05/2023 18:58

TaraRhu · 16/05/2023 18:07

Yes, or Crystal Palace which actually is at least partly cool!

Not in Crystal Palace now, unfortunately.

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