Giving up HA house for shared ownership

[Louisajane12]

Hi everyone please can I have your opinions and thoughts.
Sorry in advance for long post.

We have always private rented , however 3 years ago was given section 21 due to landlord selling , there were no other private houses available so in the end the council helped and we got housed in affordable 3 bed housing association house.

Its on a new build estate and neighbours are drug dealers and criminals regularly police raids etc.

We have started looking into shared ownership on the estate where the section is all SO houses ( no where else in the area offers SO)
We are looking to stay in this town for 10-15 years maybe longer.

The houses in question is identical and would not have moving costs etc.

My biggest worry is obviously I’d be giving up a lifelong tenancy to do this , I’m asking if that is a good idea and if for whatever reason it doesn’t work out would I be re housed ?

We have small savings for the deposit and it would initially be a small mortgage 70k for 30% share and after calculating everything it actually works out very similar in amount of mortgage / rent service charge ,it is similar to what we pay now for rent and service charge total . So I feel we actually would be paying for something at the end rather than ‘dead rent’.

we are early 40s and no other way to get onto the ladder sadly.

I am torn as this place offers security lifelong even though the nightmare neighbours. But SO would offer something in the future especially for our kids.

Has anyone gave up a lifelong tenancy and it worked out ? Thank you so much for reading

I’ve no advice re: the financial situation. I have had terrible neighbours tho, and the relief when we moved was immeasurable. The phrase ‘silence is golden’ has never rung more true that first week! I also like the thought fact my children will benefit from the proceeds of our house in the future, as it stands, we are very unlikely to have a ‘lump sum’ to help them with housing deposits etc (as we were not fortunate to receive help ourselves and I understand the struggle)

Good luck whatever you decide!

I gave up HA to buy a house in my 40’s and do not regret it at all. Make sure you get life insurance and try to also save up one savings of your own

I try not to think about needing to go back to HA I am moving forwards

Don't think I would buy a property on a bad estate - house hunting is all location, location, location.
Can you save whilst in your present house.

what is SO

i veered away from shared ownership as it just seemed to expensive but if you can afford it you could consider it

I've had several friends that have had shared ownership - all have had problems selling the property on.
One got stuck where she had to pay revaluation fees every six months, another eventually found a buyer but the HA(?) that owned the other chunk of equity didn't approve them so it all fell through.

Following because I'm thinking of doing the same. Loads of SO houses around here and some in really nice areas. The main thing that puts me off is that all SO properties are leasehold. However, buying a freehold property with a traditional mortgage will probably never be an option for me.

We have lots of shared ownership around here. They are very desirable as a purchase- especially the 3 beds. Because they allow people to get on the housing ladder.
What exactly do you mean when you say 'if it doesn't work out?'

youll own 30% - pay your mortgage on that, pay 70% rent which are subject to increases, be liable for repairs to the property also.
id stay put and save more and use the savings to buy a cheaper home later on.
for those who can’t give their kids a deposit put their name down on housing list at 18 even if it takes 5,6 - 10 years to get somewhere they will eventually.

Everyone I know selling SO has got stung in some way. Restrictions on the sale limiting it, ground rent or rent hikes, delays to sales. They’ve ended up being like rentals they lost a deposit on effectively

If the SO costs are the same then I’d consider it - someone mentioned rises to the rent element, the OP will be paying that on her current HA home anyway.

My biggest concern would be buying on a shitty estate - you’ll have issues selling if and when you need or want to.

I know someone who had a shared ownership flat that used equity built for a deposit on an open market house so it worked out for them.

Shared Ownership.

I can't give proper financial advice but I think from the point of view of security, you are almost as secure in SO as you are in HA rental. Obviously HA rental has a huge advantage over private rental because you will never be evicted due to the whims and profit-chasing of a private landlord. So you'll regularly see people stating that you would be mad to surrender a HA tenancy for a private rental, and this is true.
However, you are equally protected from the private landlords in a SO situation. You can still never be evicted. The % that you don't own is owned by a HA.

The thing that could go wrong is if you fail to keep up with payments on your mortgage, and that could spiral out of control. I would say it's safe enough so long as the amount you are borrowing is not close to the maximum your lenders would agree to lend. If your monthly budget would work out with plenty of slack for optional extras then its fine. If it would be quite tight making ends meet such that a relatively small change could leave you with costs greater than your income then stick with rental.

If you do this please budget for and have a plan to staircase up, ie eventually buy out the housing association (even if with a mortgage) so the house is entirely yours and the bank's. You may not have a huge choice of providers in your chosen areas but they vary greatly in terms of responsiveness, customer service, how cooperative they will be if you want to sell, fees etc.

Have you thought about exchanging to another property not near the neighbours? That way you get to keep your lifelong tenancy and be away from the neighbours?

They are leasehold because you don’t own the whole thing. If you staircase up it’ll become your freehold. We also didn’t pay any type of ground rent or anything while it was leasehold. It’s just a technicality because there are two parties owning the house.

(Obviously I’m talking generally, not all are the same but most I’ve come across are)

Shared ownership or HA,either can have bad neighbours. I wouldn't give up a secure HA home. Nightmare neighbours may end up moving/ getting thrown out of you report them often enough. Encourage your nice neighbours to do the same. The more that complain,the better.

^^ This, I've not been involved in shared ownership personally, but anyone I know has had issues getting out of it and the costs seemed to rise.
I also worked in a law office, always had issues with shared ownership sales.

I would definitely look into shared-ownership but not on your current estate.

Look for something in a nicer area even if it means relocating to a new town.

I might have been lucky, but I had a great experience with SO.

I bought a SO flat when I was 22 (Im in Scotland). I was renting but I always wanted to get onto the property ladder and seen this as my first step.

I lived there for 10 years with my now husband, it allowed us to have 2 children, which I dont think we would of been able to pay nursery fees for 2 if we were private renting. The rent part did go up through the years but not by much. The SO was with a HA so the rent only increased the % they were increasing their other HA properties.
It was a new build when I bought the flat, so apart from the a tap change, boiler service, flooring and decoration I didn't really have to do anything else to the property throughout the years.

2 years ago, I sold the SO making a good profit on my share which has allowed us to buy a normal house.

Your issue is the that it’s a new build estate. Do not buy on it.

There is a long established estate on the edge of my town, it’s nice. A few new HA houses were built in an area right near the centre of town. My friend was allocated one, on the list for 7 years. Issue is almost all the neighbours have been awful. Points mean you go up the list and to get points you need issues. Sometimes those points are through no fault of your own such as yourselves being made homeless or through disability but just as often it means problems that are an issue. A new estate of HA houses is being built on the other edge of my town. It is a mix of SO and HA rentals. I fully expect it to not anywhere near as nice as the established estate.

The problem with HA or any rented housing is people like your neighbours can't be evicted quickly and even if they could they just get moved on.

Look for a transfer.

Why on earth would you commit to buying somewhere on an estate filled with 'drug dealers and criminals'??!! With HA you can exchange surely?

Another vote for looking into a house swap. If you have transport you could swap with a nice village house. Swapping with someone that needs to be in the town but doesn’t have transport.
Depending on your local authority you may swap with council property and gain right to buy rights too.

The estate is huge and houses are still being built on it, the drug dealers etc are nearer the front where as the SO properties are more towards the back, I do realise I could still get bad neighbours in the SO houses but it’s more unlikely I think.

The children are settled in schools and work commitments mean we cannot leave the town .
If we go ahead we are looking at only a 10 maybe 12 year mortgage .
There are no other SO properties in this town.
Our plan would most likely stay in the house for 10/12 years then either sell to use it as a deposit for a ‘normal house and mortgage ‘ or staircase upto 100 .% ( which would be more ideal then we would own it and be freehold

Swapping we did think about but we think it’s a lot of upheaval with still not owning anything , also there’s not alot of HA properties in the town that aren’t on this estate. We do have Right to aquire on this current house but the discount is low I think 10k when I looked into it so can’t afford a full mortgage on this and I wouldn’t want to buy this current house due to the neighbours ( which have been reported by me and others on the road ) nothing done though.