Shared ownership schemes, do you have one? How do they work?

[TLO]

After the birth of our second child we are bursting out of the seams in our house, we really need to move to a bigger house, but we can't afford to pay anymore on a mortgage than we do now (just over £500 a month)

We have done pretty well with our house, it has doubled in value since we bought it, but so has everything else around here, we re-mortgaged at the beginning of last year to pay an IVA (it was a lump sum one rather than a five year deal), so we don't really know if we would even be able to get a mortgage full stop, or if we did it is likely to be with a higher interest rate.

Can anyone explain to me exactly how the shared ownership schemes work, if we are likely to see a hike in the repayments, and if it does actually work, or point me in the right direction for a good website that will answer my questions?

Thanks in advance.

Anyone please?

Hi
We're in shared ownership! I'm not sure from your post whether you already have a mortgage, if you do I know it's a condition with our housing association that you can't buy a shared ownership property unless you've never been on the property ladder before. I don't know if this is the case across the board however!
With our scheme, we currently have a mortgage on 35% of the property and can buy the full 100% of the property if we want in no more than 3 stages. We pay a peppercorn rent on the other 65% (just under £200 a month). The only downside that we have discovered is you have to get written permission for any work to the house (even putting in a new kitchen I believe!) or garden, we have to pay buildings insurance via the association and are paying an inflated price, if anything goes wrong with the house (except structurally) we have to foot the bill which would be reasonable but our house is over 10 yrs old and the boiler was never serviced before we got here etc!
The other thing to consider is that it can be difficult to get a mortgage, we could only get a mortgage from one provider, no one else would mortgage for less than 40%! Thaty might have changed of course!
HTH!

Thanks redclover, we do already have a mortgage, sorry if it was confusing, I suppose the first thing to find out is if we can actually do it then, having already been on the property ladder.

Good luck with that! I'm not sure if there's an overall website relating to shared ownership, and circumstances might be different if you're a 'keyworker'? We kind of stumbled into shared ownership after going round and round estate agents for months waiting for a property to come on the market. We've spoken to people since and I think the more normal way isto put your namedown on a waiting list and you get points depending on your situation, I know we were also means tested as therewas an upper threshold for earnings, and if I ever go get my graduate job we will have to move or buy outright as our earnings will go above the limit!

I think it will be difficult to get a house under shared home ownership if you already have a house, usually they like you to be on a waiting list. Best bet is to give someone like Tower homes or Gallions Housing Association a call.
Incidentally a mortgage below 40% is not a problem and lenders like Woolwich, Leeds Building Society and Kent Reliance will lend on shared home ownership. (Minimum is £25k usually)
Also you have a mortgage on say 40% of the property and the rest you pay rent to the housing association usually at around 3% a month, eg £100,000 cost £250 month then the mortgage on top.
You also pay a monthly service charge, can be £100 month or more depending on property.
A mortgage after an IVA? I think you answered that question when you said you increased the mortgage to pay it off, so you could borrow further if you wish. But it will be the higher mortgage rate you will have to bear in mind

We are in the exact same situation as you TLO, we are atm in a 2 bed but have 2 children so need a bigger house.

We have a mortgage atm, had it a year and have just put an offer in on a shared ownership (but for 50%) all is fine, and set up ready to go we just need to sell ours (on market atm) they have accepted our offer, the mortgage side is a bit tricky though, there are not many companies who will deal with shared ownership, we are having to go with a higher rate with a company called preffered mortgages but this is the only way we can afford a bigger house.

Pucca, have you tried Leeds Building Socity or Woolwich? Preferred are really only for those with credit problems.

BGD...That is our prob

Dh did have credit probs in the past unfortunately so we dont really have a choice, we got this mortgage through countrywide group.

Sorry to hear that, maybe when your tie in period ends you can remortgage to a mainstream lender,

BGD...Yes that is what we are hoping to be able to do, we will have a fixed rate for 2 yrs then hopefully we will be in a better position to get a better rate.

Our situation is much like redclover - we own 40%, can 'staircase' up to 100% if and when we like, pay peppercorn rent on rest. We don't have bureaucracy re: house changes. We did find the rent and service charges varied quite a bit depending on which association you are with. We did have to be on their waiting list for a little while - they do prioritise 1st time buyers. When we sell, if we have staircased to 100% then obv. we can sell on open market. If we do not own 100%, then we have to sell back to housing association, and they undervalue house (potentially by a fair whack) because it is to help 1st time buyers. However, provided we have kept track of our improvements, we would get the extra money that would come from the increased value of the house. And yes, finding the mortgage was a bit tricky because of lack of banks that do s.ownership mortgages.

Thanks everyone, it sounds like we could do it if we put our mind to it then.

Have a search on the web under shared home ownership, most housing association should have houses for sale on there