To be confused how people can afford shared ownership

[beary77]

Can someone share their experience of shared ownership? How much do you pay in total monthly? It’s a good way to get on the property ladder but how do you deal with the increased mortgage rates? As you are paying for both rent & mortgage?

Not really. The full value of our SO property was 500k. Our household income at the time was 70k which wasn't enough to get a mortgage for the property, despite our 50k deposit. The property was also very reasonably priced for the area. There were no three bed houses in the area that we could afford to buy without SO.

I think you are agreeing with me? Properties around here worth 300k would apparently be about 1500 a month according to Rightmove but shared ownership 300k is about a 1000 a month.

For a normal mortgage they'd be 1500 a month. Similar for normal renting. Shared ownership truly is the way. I think the haters just don't understand it and think it sounds like a scam which I would probably think too if I didn't know better

Sorry I am agreeing with you my post was in response to @Lilacdew

Speaking as someone who is in the process of selling their shared ownership property and made 30k of equity in four years I can confirm they are not a scam. That being said, different housing associations will have different rules and ours was quite lenient compared to others. I think it's a great scheme to get on the ladder - but I do think that it's best for people who want to stay in the house they are buying just because of the complexities of selling a SO.

I think people should also be aware of their lease agreement going in. The rent goes up each year and this in turn can make it unaffordable for some if your financial position hasn't changed.

@DistinguishedSocialCommentator I never paid rent on the 30% owned by the HA. They were like a silent partner who ultimately made their profit from either the sale of the whole house or market value of their share, had I ultimately bought them out.
So I still don't see why it's obvious that they would refuse any house improvement which would increase the value and therefore their profit. Unless they were worried about cowboy builders and potential damage to the structure? Idk.

OP, generally the scheme I had was very good. I was only paying a mortgage, not rent at all, there were no time constraints on when I had to buy the HA share etc. I don't think all shared ownership agreements have similar terms so it's hard to compare. You'd have to look at the small print really carefully. I was very lucky.

We bought a flat under a shared ownership scheme and honestly wouldn’t recommend it unless you are absolutely certain you will get a decent payrise every year to be able to afford the yearly increase on rent & service charge which started off reasonable and a few years later was astronomical.

We’d also get letters from the HA every now and then to say they’d miscalculated fees / had a deficit and needed X amount more money off us. Thankfully DH & I could always cover it but it caused a lot of stress for a lot of our neighbours.

Also when it came to sell, you have to pay estate agent fees on the total value of the property rather than your share (which is fair enough as it’s still the same amount of work for EA) but it really ate into any value the property had gone up by. It was also really stressful and complicated trying to sell and made a lot of extra work for the lawyers.

Maybe we got unlucky with such a dire HA but I wouldn’t recommend to anyone now - also our block was full of young people with professional jobs who just couldn’t afford a massive deposit (we’re in the SE) so definitely not people topping it up with benefits!!

I’m in a SO and consider myself extremely lucky to be here. I am in the south east, so rent is extortionate. I own 50% and mortgage/rent is under £700pm, that includes service charge. I’ve been here 10 years and rent has barely gone up in that time. They have also let me extend and convert the loft. Yes there is a LOT of red tape but if I was renting a house of this size in my area it would be over £1400pm, which is unaffordable for me on my own (and would therefore be covered by universal credit). I have 3 friends in SO and their experience is the same. I’ve also sold a shared ownership and whilst the estate agent was shit (lied to me about selling one before when they actually had no idea what was involved) it was smooth and quick with almost 30 interested parties.

So no scams here.