Flat vs shared ownership house

[climbelon]

Hi,
I will be moving house with my toddler following separation with his dad. We jointly own a house which will be going on the market next week. I should have a decent deposit but will only be able to get a small mortgage as I work part time on a low income. Assuming the equity is split equally and I keep my savings, I will be able to afford either a small flat or a shared ownership house. Looking for considerations about which route to go down.

I would like to stay part time if possible so as not to put DS in nursery immediately - one transition at a time. From initial research and viewings it looks like I can get a 1 bed flat in a nicer area (looking at ones I can partition a room) or a bigger and shabbier 2 bed flat in a rougher area.

Shared ownership seems to be a good solution as I can staircase once I increase my hours and get a bigger mortgage. High service charges and ground rents are putting me off and I am aware these can be increased even further. I've also heard about problems with new builds in terms of significant repairs needed.

I'd also be interested in perspectives on flats in purpose built blocks vs older houses split into flats/maisonette. And anything to consider with leaseholds and share of freehold.

Thank you

I would get a 1 one bed in a nicer area because honestly at this point I think the good area is the most important thing, especially when it comes to flats. There’s nothing worse than bad neighbours ruining the communal area.

I can’t give an opinion on much else. I’ve thought about SO before as well but I just don’t think it’s worth it (for me).

You want a shared ownership house not a flat, leaseholds have many issues especially flats and it's even worse for shared ownership folks with flats. If you're going to do shared ownership only do it on a house. Although if you live in London there's rarely shared ownership houses

Thanks for your perspectives. The shared ownership houses I've seen are still leasehold. I assume you would buy the freehold if you staircased all the way.

Leaning towards a flat as part of a house, unless I can stretch to a house. Will probably change my mind many more times in the process haha

all shared ownership properties are leasehold with houses once you staircase to 100% you then own the freehold. The positive about houses is that the service charges tend to be a lot lower. There's less random bills for new lifts and compulsory changes like new windows. If buying a flat be prepared for very expensive service charges as well as expensive rent rises as well as random section 20s a flat is more costly to own x

Not all shared ownership houses allow you to buy the freehold. Double-check that when you’re looking if it’s important to you.

I personally would avoid shared ownership. I haven't looked at it for a while, but it was incredibly expensive when I did look at it a few years ago. The "mortgage" payments were reasonable, but unless you have a large upfront %, the "rent" payments were crippling.

I used to have a leasehold flat. It was a purpose built flat (ex-council). The ground rent was about £100/pa and the service charge was about £1600pa. This was in the southeast, so quite reasonable I would say. I bought the flat when there were 97 years left on the lease and I made it a goal to sell it again before it dropped below 90 years left. There are staggered prices for extending the lease which went up as the decades went down. The amount it would cost to renew the lease once it fell below 90 years was significantly more than if I renewed it at 91 years left (I didn't want the hassle of renewing but didn't want to leave it so late that the buyers would have to think about it straight away). Also there were rules that said that you had to live there for at least 2 years before you could apply to extend the lease.

As mentioned, this was a purpose built ex-council flat. There were 3 flats in the block and the other 2 were both still owned by the council. When it was time to sell, I had one buyer who pulled out when they realised that the neighbours were council tenants! (snobby, sure, but something you may need to consider when selling).

I would go for a flat but make sure you look at the service charges, the length if the lease and the cost of extending the lease if you needed to.

As for where to buy, they say buy the worst house on the best street. You can fix up a bad house, buy you can't change the neighbours or the amenities.