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Original poster

Shared ownership, is it a risky option?

23 replies

NeedSleepNow · 08/06/2023 19:51

I am a single parent going through a divorce and the family home will soon be sold. I have an issue with how to house myself and my 3 children after, I can't afford a mortgage on my own for anything bigger than a 2 bed flat, I could rent but private rental is so expensive here and I would be looking at £1500 a month for a 3 bed house so my equity from the family home would disappear very quickly and I would no longer be able to claim universal credit to help with my childcare costs.

I'm now looking into shared ownership. There aren't many properties available near me and most are only 2 beds but have stumbled across 'Your home' by Heylo where you can purchase any second hand property on the open market as shared ownership. Heylo are a registered provider of social housing on the government website but they are a fire profit one so the rental rates are higher than for hosting association shared ownership. Does anyone know about the legalities of pursuant through someone like Heylo, I work what would happen if they went bust being a good profit company. Would my money be safe or could I loose the house I had purchased as shared ownership?

I worry I would be taking a massive risk but I don't really know what else to do

OP posts:
CollieWobbles2023 · 08/06/2023 20:19

I had a shared ownership for 5 years. It was amazing! My credit score improved and my equity grew.

Best yet - there was queue of people wanting it when I was ready to move on (we had 20 applicants!)

It was valued higher and I made £25k profit 😍

It was the best thing I ever did.

You'll find a certain generation hates shared ownership - because schemes were iffy decades ago. But it isn't like that anymore (they won't agree though 😂)

My shared ownership mortgage was with Santander and it was so easy to get! Our rent only increased by about £10 a year....

Good luck!!

Original poster
NeedSleepNow · 08/06/2023 20:39

CollieWobbles2023 · 08/06/2023 20:19

I had a shared ownership for 5 years. It was amazing! My credit score improved and my equity grew.

Best yet - there was queue of people wanting it when I was ready to move on (we had 20 applicants!)

It was valued higher and I made £25k profit 😍

It was the best thing I ever did.

You'll find a certain generation hates shared ownership - because schemes were iffy decades ago. But it isn't like that anymore (they won't agree though 😂)

My shared ownership mortgage was with Santander and it was so easy to get! Our rent only increased by about £10 a year....

Good luck!!

That sounds like you had a great experience with it @CollieWobbles2023 . Thanks for sharing your experience of it as most people I have spoken with irl think it is a terrible option.

The way I see it though, it means I no longer have to jointly own a property with my stbxh (he rents elsewhere but still turns up at the property when he feels like it and I'm unable to have privacy or boundaries), it provides more stability than private renting and means I still protect the equity I currently have in the former marital home rather than spending it all on rent within a few years. I hope it will be a temporary thing for around 5 years, after which I may have a better job and be able to get a mortgage for a house on my own.

I just worry about how safe an option it is doing it through a private for profit housing provider rather than a not for profit one. Heylo, who I have been looking at, are a registered provider of social housing so I'm hoping that means my money would be protected if anything happened to Heylo. I know the rent is a lot higher with them than with HAs and goes up at a faster rate but as long as I don't stay there indefinitely it shouldn't become unmanageable.

OP posts:
messybutfun · 08/06/2023 22:02

What are you referring to with ,is my money safe with them?’. I assume you are still buying a share of the property with your money and that legally belongs to you. Is that not the case?

Senseofsomething · 08/06/2023 22:25

I’m in shared ownership but with a Housing Association. Single parent. It has been by far the best option for my family. Open market was not affordable and private rental properties are (obviously) hugely expensive in comparison. And tenancies are so insecure therefore this made sense and is a secure, comfortable affordable home for my family. I know there are other families waiting for properties like mine so I don’t feel stuck.

Senseofsomething · 08/06/2023 22:26

I don’t know anything about Heylo though.

AmeliaWarnerBros · 08/06/2023 22:29

Go for it, OP. I'm hoping to do the same in a few months- also single (happily), it is the only way I can do it in the south. 😊

stepstepstep · 08/06/2023 22:32

Shared ownership has been fabulous for me, also after divorce. It’s given myself & kids a secure home for a fraction of the cost and never had a moment’s bother from the HA. I’m very grateful.

LemonRoseCat · 08/06/2023 22:40

Shared ownership is risky but I am doing it.

You need to go in with eyes wide open and not fall into silly traps like thinking it’s best to have no mortgage and pay more rent. A lot of people doing SO do not seem to understand what they’re doing - and that concerns me. You see posts in SO FB groups all the time about people trying to buy a house with no survey or with seemingly no understanding of how mortgages work. I just don’t think there is that level of financial illiteracy on the open market- and cynical developers take advantage.

However (and I may be wrong) but I think Haylo may be a different scheme and with it’s own serious downfalls. You need to look into that specifically.

CompleteUnknown · 08/06/2023 23:12

There was a thread about shared ownership in the Home & Garden...Property/DIY section fairly recently. You may want to take a look

Original poster
NeedSleepNow · 09/06/2023 00:04

messybutfun · 08/06/2023 22:02

What are you referring to with ,is my money safe with them?’. I assume you are still buying a share of the property with your money and that legally belongs to you. Is that not the case?

I don't really know what I mean exactly! I suppose my worry is that as the scheme I am looking at is with a for profit housing provider is it regulated in the same way as housing association shared ownership? The housing provider is listed as a provider of social housing on the government website so I am hoping it is all ok and above board. I worry that if the housing provider got into financial difficulties and was bought out how it would affect me and my share of the property, could they force me to sell before I wanted to?

OP posts:
Original poster
NeedSleepNow · 09/06/2023 00:08

It sounds like a lot of you have had positive experiences so far which is great to hear.

I've been reading up on it and can see that there are obviously downsides like being 100% responsible for repair costs etc. but it seems better than the alternative options open to me at the moment. I will definitely do more research to make sure it is the right thing for me and that I am going in to it fully informed and with my eyes open!

OP posts:
Original poster
NeedSleepNow · 09/06/2023 08:22

CompleteUnknown · 08/06/2023 23:14

Thank you 🙂

OP posts:
OfficerPastiche · 09/06/2023 12:36

I'd suggest posting on the money saving expert forum lots of knowledgeablw peopl th re

Original poster
NeedSleepNow · 09/06/2023 15:51

OfficerPastiche · 09/06/2023 12:36

I'd suggest posting on the money saving expert forum lots of knowledgeablw peopl th re

Thank you I'll do that, I hadn't thought of posting there.

OP posts:
starpatch · 11/06/2023 05:08

You legally own that share of the house with shared ownership so it's not risky in that sense. I think my concern would be if Heylo can increase the rent suddenly but hopefully they have committed to a formula which would be in your lease with them so that would be ok. With shared ownership you usually pay all repairs yourself- so choose a property in good repair. Shared ownership worked out well for me also I wouldn't say it was risky You would have a conveyancing solicitor so can ask them these questions. Do look at resales there are websites which list them.

Original poster
NeedSleepNow · 11/06/2023 11:12

starpatch · 11/06/2023 05:08

You legally own that share of the house with shared ownership so it's not risky in that sense. I think my concern would be if Heylo can increase the rent suddenly but hopefully they have committed to a formula which would be in your lease with them so that would be ok. With shared ownership you usually pay all repairs yourself- so choose a property in good repair. Shared ownership worked out well for me also I wouldn't say it was risky You would have a conveyancing solicitor so can ask them these questions. Do look at resales there are websites which list them.

Thank you. Heylo's rent goes up annually by rtpi + 0.5%, so obviously at the moment while rtpi is high the rent would go up quite a lot annually. At the moment that isn't too much of an issue, I would get some help towards the rent side through universal credits and have worked out my budget and have factored in rental increases each year for a while.

I'm hoping with the money from the sale of the former marital home after divorce that I could purchase a 60% share with cash, get a small mortgage and then pay rent on the rest.

My plan is that after 5-7 years I would be in a position to move and just get a mortgage on my own as hopefully by then I will have a better paid job as I am currently retraining.

OP posts:
WonderDays · 13/06/2023 19:57

My parents did it years ago, it was a brilliant stepping stone for our family.

Plexie · 14/06/2023 13:25

To all the posters jumping in saying shared ownership is a great idea - you're probably not talking about the kind of scheme the OP is talking about.

This Heylo 'Your Home' scheme seems to be a way to purchase a 'normal' property already on the market but as shared ownership. Not buying an existing shared-ownership property.

"Your Home works in partnership with estate agents across England and Wales to turn existing properties already for sale into part buy – part rent."
https://heylohousing.com/your-home

I've never heard of shared-ownership outside of housing association schemes. I think you're right to be wary of this and need to look into it a lot further.

Amberandgreen · 25/06/2023 23:17

I’m also looking into this scheme, would be interested to hear if anyone had experience with dealing with Heylo

LemonRoseCat · 30/06/2023 20:45

As someone has mentioned before Heylo is different to normal shared ownership. My understanding is that it is unregulated and therefore very risky!

Original poster
NeedSleepNow · 01/07/2023 09:14

LemonRoseCat · 30/06/2023 20:45

As someone has mentioned before Heylo is different to normal shared ownership. My understanding is that it is unregulated and therefore very risky!

@LemonRoseCat Can I ask in what way is it unregulated? This is why I am so confused and unsure of what the risks are.

They are a registered provider of social housing (listed on the. Gov website
https://www.gov.uk/government/publications/registered-providers-of-social-housing/list-of-registered-providers-14-april-2022-accessible-version
but they are a for profit company instead of a housing provider).

I had hoped that as they are listed on the. Gov website as a registered provider that they would have to adhere to some rules/regulations etc. I know they charge a much higher rent than HAs do on the unowned portion and I think the yearly increase in rent hasn't been capped in the same way as not for profit housing providers. But I can't quite work out what all of the other risks are as I can't find a lot of information on it.

List of registered providers – 8 June 2023 (accessible version)

https://www.gov.uk/government/publications/registered-providers-of-social-housing/list-of-registered-providers-14-april-2022-accessible-version

OP posts:
MidnightMeltdown · 01/07/2023 09:29

Never owned one myself, but they seem to super popular around my way. They sell extremely quickly so are clearly in demand. Can't imagine that you'd have trouble selling it.

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