To sell my home and buy a shared ownership one??

[ohnoohnoohnoohno]

I'm a single parent to 2 DC aged 10y & 8y. After my divorce I bought a small semi detached for us. However whilst I haven't got in arrears I'm accumulating debt and struggling to keep afloat.

AIBU to sell this home and buy a shared ownership? I can use the equity from my house sale to clear debts and put down a good deposit. I'd own approx 35% off the new house (which would be bigger). I'd have no mortgage and universal credit will pay the rent element. I work but in a low paid NHS job. I would have more disposable income and could save to buy more of the property in the future.

Does it sound too good to be true??

A lot of shared ownership are for first time buyers only.

Yes but not these ones. It says as long as you are SSTC you can apply.

Would they let you buy without a mortgage? A lot of shared ownership around here insist that you buy the largest share they consider you can afford.

Yes I would do it.

I'm not sure. Definitely something to consider. I can pay the minimum deposit which is 35% with my equity.

It sounds like your current situation is not tenable and you're getting deeper into debt, so you are not unreasonable to find an alternative. Can you increase your income enough to get you out of debt?

If it gets you out of debt and keeps you on the housing ladder I'd go for it. Just make sure you can afford the increase in rent each year and know that the cost of any repairs in future will be your responsibility and you may also have to pay service charges I think so check you have enough in your budget each month to cover these. Good luck 🤞

@ohnoohnoohnoohno I spotted your thread linked at the bottom of a similar one I posted. I wonder did you look any further into this?

Don't hesitate. I'd do it if I were you.

Just do your research - https://www.insidehousing.co.uk/news/shared-ownership-can-become-financially-unsustainable-for-buyers-over-time-report-warns-81689

To go against the flow, I would only do this as a last resort. I haven’t heard of many people who have ended up owning all of a shared ownership and they are hard to sell on. If it’s at all possible I think it would be better to sell and buy smaller, it doesn’t have to be forever. I have had to do this, so do understand it’s hard.

When I got divorce several different people ( solicitor , mortgage advisor, financial advisor) all advised against shared ownership, many here worked out more than my mortgage too with the rent and the lending combined. If you’ve got a deposit then better to just buy.

I wouldn’t do it. Could you downsize on another properly yourself ?

To add, I did this when they first came out and got out quickly. You have all the responsibility and don't own the property, have to cover repairs, service charges rise and trying to get anything done was a nightmare. Not for me and I've advised a number of friends against this too, having sent them off to do research and check out reviews of the developers before buying. Large print giveth and in shared ownership, the small print very much taketh away!

I’ve never heard that saying, I’m storing it for future use!

I have lived in 2 shared ownership properties and had positive experiences. They were with housing associations so the rent portion was very affordable. Much cheaper than privately renting and in my experience shared ownership properties are very easy to sell round where I live. They are very sought-after.

That said, I’m sure it can vary depending on where you are and who it is with so I would research carefully!

@ohnoohnoohnoohno in my experience you'd be nuts. Its incredibly difficult to sell shared ownership and having to pay rent again is horrible, uc love to mess shared owners around too.

Well I decided to go for it. As I'm a single parent in receipt of UC I will have no housing costs as they cover the rent and service charge. I won't have a mortgage and I'm 'buying' 31% using the proceeds from my house sale. I will clear my debt and be significantly better off. I'm also moving from a very small 2.5 bedroom semi to a 4 bed detached which is almost double sqft. My youngest is 8y so I have 10y until I no longer receive UC. In the meantime I'm looking at promotion (front line NHS) so I can cover the shortfall in the future.

A lot of the previous issues with SO properties were changed and rectified last year. Longer leases, capped rents, maintenance provisions etc.

If I want I can buy 1% a year with no fees or save up and buy a bigger chunk.

The SO houses here all got snapped up very quickly so it can't be that bad!

Makes sense, My house is SO. It's what I could afford after getting divorced. I own 40% and the rent & mortgage combined is definitely cheaper than private rent.
I could staircase to full ownership if I want to, but plan on downsizing once kids are older.
I have no concerns about selling tbh and it was definitely the best decision for me.

Maybe it depends on area but I’ve found the opposite re selling a s/o property. They sell really quickly where I am.

I would be very cautious.
Service charges have rocketed on shared ownership properties. 8n some cases from £4000 to £16000 per year.
Get your solicitor to check the contract regarding this.
Personally I would avoid at all costs.

Overall they don't

Do you have an accepted offer on your current house? If not they won’t let you proceed with trying to buy a SO

"If I want I can buy 1% a year with no fees or save up and buy a bigger chunk"...

I'm a SO resident with a 45% share.
It's unlikely I'd ever be able to afford staircasing due to the fees involved (valuations etc) with my LHA...

I'd love to buy 1% a year with no fees - what a fabulous way to increase your equity and investment. Is this option part of the new legislation that was introduced last year for SO properties and if so, I wonder if they'll eventually introduce it retrospectively, for all SO properties? It would certainly encourage more people to go down this route to get on the home ownership ladder!

I would be extremely surprised if they accepted an application on a 4 bed house if you only have 2 children. Bigger families are desperate for them!

If you remember it, you will not go wrong. Always check out what the sales offer doesn't say!!!!