Shared Ownership

[cantwaitfortheholidays]

Hi, just wondering if anyone knows how "Shared Ownership" works - I've seen a scheme, at an initial glance it appears that it is for 25% of £113750. 25% being approx £28,000.

If you then put a lump of savings in, do you have to pay part (25%) mortgage and (75%) part rent?
What if you've saved more than 25% of the property value?
What happens when you sell it?
You could presumeably only ever get the 25%=£28,000 back when you sell... Does that sound right? So it's not much of an investment then?

Sorry - I think I had it completely the wrong way around 25%of property = £113750.
So, that changes the numbers somewhat...

I have a shared ownership property (40%). I have a mortgage for that percentage and I pay rent on the remainder (which is ridiculously low). Any increase in the value of the property if I sell is divided between me and the housing association (40/60 split). You can buy additional shares at any time, but the additional shares will be valued and bought at the current market rate. (Could increase or decrease). Generally you have to start with the percentage they have advertised the property at but I believe you may be able to offer to buy a higher percentage. It works well for me as I live in a relatively expensive area and have an average wage, so although I had saved a deposit, I wouldn’t have been able to borrow enough money for a whole property on my own. If you can afford to buy a whole property, then do it. If not, shared ownership seems to be the only option. It’s worked for me so far - I just hope to buy bigger chunks of the property as my wage increases or my circumstances change.

Thanks. Yes I also currently work( and DS goes to school) in a very expensive area. I will see if I even earn enough to be eligible for this. Unless I can get a job in an area where I can afford the properties this is the only option I can see.

I bought at 25/75 split. Then bought another 25 and the the remaining 50. You don't have to buy all of it. When you do come to sell the % is used rather than the £ money so if the value has increased your 25% could be larger than the original 25%.
If that makes sense?!

You can only buy certain % . So you can't add a lump sum unless it's a certain % like another 25%.

We're looking at perhaps going down the shared ownership route. Is it true they raise the service charges quite a lot once you are on board?

My service charge has stayed about the same but I’ve only had my property under three years. Rent can not increase by more than 1% a year I think (might be 3%), and has gone up about a pound each year.

I don't have a service charge, or if I did it was wrapped up in the rent which barely increased.
My HA was a charity and so were there to help, not to rip off. Maybe that makes a difference?