Shared ownership or keep renting?

[LooseyInTheSky]

Hello,

Just a quick one. I'm 26, living in Zone 2 in London, renting a one bed flat for £1,400 per month with my boyfriend.

Boyfriend and I live (financially) like housemates. All bills split 50-50, but no financial integration. May change in the future (if we decide to get married) but we're happy with the set up at the moment.

I earn £42k and have £30k savings. BF earns more but has a smaller stash of savings. Buying would be cheaper than renting, but buying outright in London isn't a possibility.

Does anybody have any experience of shared ownership? Would you recommend it in our circumstances? If we did buy, any advice on how we structure it between us?

Yes to shared ownership because the equity in your share especially in London will appreciate in a few years. When my sister sold her shared ownership flat, she had accumulated enough equity to put down a good deposit on a non shared ownership property in the same part of London.

Were there any drawbacks to your sister's shared ownership shartsi?

I’m not sure you’ll be entitled to it with that income OP. There’s a cut off point.

My sister bought a resale property which are better than new builds in appreciating value. The only draw back was that it was not always easy to get help from the housing association with regards to repairs in the common parts and were very slow when it came to selling.

I’m not sure you’ll be entitled to it with that income OP. There’s a cut off point.

One beds seem to have a cut off of £80k, which we're not eligible for. But 2 beds in our area seem to be ok - we don't cross £90k. More research needed for sure though.

Ahh, here is the answer:

www.sharetobuy.com/guides-and-faqs/shared-ownership-eligibility/

London cut off is £90k. We're £87k at the moment. One more promotion for us and it might not be feasible, you're right.

Put it this way: at the moment you are paying someone else’s morgage, when you leave, you won’t see a penny out of the £1400 you’ve been putting into it.
Shared ownership has a rent part, but what’s yours is yours and you can use that as a deposit for your next home.
With shared ownership you have stability: no landlord to give you notice of eviction etc.

I am in shared ownedship, btw, it’s been fantastic for me.

What are the drawbacks of shared ownership BFencingWire?

Aren't the costs on top of mortgage, of rent and service charges high?

Shared ownership would be cheaper than my rent.

Do you miss having a landlord 8Fencing? Our boiler just packed in and it was lovely having them take care of everything, including the bill. We have fantastic landlords.

The rent on the unsold equity is between 2.5and 3% but check the conditions in the lease.
Combined household income cap is 90k in London.
There is no longer a limit on number of bedrooms.

We are in a shared ownership house and very happy with it. I would recommend it as long as you have no plans to move anywhere else in the near future as resale can be tough especially in new build developments. The service charges would be a consideration in a s/o flat but ours are quite low as it's just for maintenance of the communal garden areas.

If you do it, buy as big a share as you can afford.

In our area, the houses were allocated in order of need, so the lowest eligible incomes had priority. We were on a reserve list but thankfully got our place.

The only other thing is the responsibility for snagging items as we have been passed around a bit between developers, builders and housing assoc.

Have you checked out the price of other flats in the same area? I ruled out shared ownership when I was looking as it always seemed a lot more expensive.

Do you know what the service charges etc would be as well?

A 2 bed flat near us is half a million. How much deposit would we need for that?

No, I don’t miss having a landlord at all. Some are good, some are scumbags, but you are at their mercy.
I bought a newbuilt, everything brand new. I have an ‘if shit hits the fan’ fund for boiler/electrics/plimbing repairs, it’s my own insurance. Yes, £3,000 for a new boiler is a pain, but they don’t break yearly, so I’ve been saving for any eventual repairs.

sunshine, no, all in all I pay nearly £200 less than my previous rent, about £450 under the rental prices around here.
Rent is capped by the government, they can’t increase it by more than 0.5% in a year.
In the estate next to mine, the service charges are ridiculous. Mine is very reasonable and it includes building insurance. Basically, shop around.

loosey, with share ownership, my experience is you have to buy a minimum of 33%, which would come to £166,666.
Find a financial advisor, they can help immensely, but how it works is like this: a minimum deposit would be 10%. So, £16,666. The bank then gives you a mortgage for the remainder, £150,000. Here it’s where you need a financial advisor, they have access to deals. But, the less you borrow, the lower the interest rate. So throw as much as you can at the deposit and the interest will be lower.

I did shared ownership 20 years ago. Went in with a 2k deposit and came out 5 years later with 70k to put down on a private house. I can't see why anyone eligible wouldnt do it.

It may also be worth looking at Help to Buy. You pay 60% of the price and you get a loan for the remainder 40% that is interest free for 5 years.