is anyone in a shared ownership place

[pteradactyl]

Hi all
I haven't posted here before so sorry if it's the wrong place or there is a really obvious thread I have missed.
I was looking for people's opinions of shared ownership, ideally people who have lived/live in a house or flat under the scheme.
A 'proper' mortgage is really just not doable as rent eats up a large amount of disposable income and saving the deposit is not going to happen in the next 8-10 years. A shared ownership deposit is far more manageable. However, I have only ever heard negative stories about it and wondered if anyone actually like them?!
I guess a lot of people will just say save up for longer and do it on a traditional mortgage but just curious. We have looked at the shared equity schemes and they all seem to be offered on really expensive houses around here so despite only beeding a 5% deposit the actual amount needed is basically the same as 10% of a more moderately priced place so not really helping us at all
Looking forward to hearing some views :)

Just selling our shared ownership flat.
The pros are, our share doubled in value since we've owned it, it was very easy to find a buyer as they find one for you (for a fee). The rent was low. You can staircase and buy more shares so you can eventually own it outright if you wish.

Cons, even though you don't own all of it you have to ask permission for home improvements (like fitting a new kitchen or changing carpet) and they have always agreed but don't share the costs. It can be difficult to get anything dealt with but that is probably just the housing association that runs mine.

Overall I have been happy with my shared ownership experience, we wasn't able to afford a full mortgage at the time but we are able to now using the equity in our share

Don't own one myself but have several friends who do, it's very common in London.

The worry used to be they would be difficult to sell on. Now there are so many people in the same situation as you / they are a good option it seems they are hard to get...

You would have to request to make changes to a leasehold property in the same way as mentioned by PP, although probably not to the same level.

Yes I used to worry that we wouldn't be able to sell ours but it sold very quickly and we had 2 prospective buyers. The other downside is that when you come to sell, you can't sell it more than the value on the survey. so if two people want it they decide by criteria not by who wants to pay more. This wasn't an issue as it was fairly valued.

I have a SO flat but we staircased last year so now own it outright. They can be brilliant but the quality of the properties and how good the deal is varies loads. If you're buying a new build you're often paying a premium for that and some of them are overpriced (same applies for normal ownership obviously - I would prob never buy new build for that reason), you also need to watch out for the service charge which you'll need to pay on top of rent (assuming it's a flat) - they can be extortionate. Mine was a second hand sale of a conversion done 15 yrs ago, rent and service charge were reasonable. In London there is massive demand for them as so many people wanting to get on the property ladder.

I see SO properties as basically like a property ISA or something. You have some exposure to the property market but not full exposure, and you are essentially buying secure tenancy.

I have 4 friends in SO properties. Mainly single mid-thirties women who have good jobs in London but not enough cash to buy a flat outright on a single income.

Some financial drawbacks -
If you own 50%:
You pay 100% of the service charge, despite paying rent on 50% and mortgage on 50%.
You pay 100% of any improvements like new kitchen, bathroom, flooring, but only get 50% of the value uplift benefit when selling.

You need to be careful to keep ownership between something like 30%-60% unless you can staircase up to 100%. Hardly anyone is in the market for buying a stake at like 75% or 80% (not that affordable, and still get hassle of SO).

IMO the blocks are generally well kept - people live there long term and are invested in them as owners - so balconies have plants on, that kind of thing.

There is stiff comp for resale SO flats. My friend went for loads and was only successful on like the 10th and she lived and worked in the borough.

You need to make sure flat will be suitable for you long term - there have been issue where people can not sell (not in london) and they only get permission to rent out for like 6 or 12 months. So you can be stuck in a 1 bed flat with 2 kids if circumstances change.

I think that if secure tenancy was important and I couldn't afford to by 100%, I would go for a SO flat. I wasn't that taken with the idea to start with due to the financial ownership mismatch but actually rather a nice central SO flat than a grotty conversion in zone 72.

We have S/O at 50%.

It got us on the market and I genuinely feel like a home owner, the 'shared' aspect isn't an issue at all. Yes we had to ask for permission to change big things like the kitchen, but when we come to sell or buy more, the valuation of our half has to take into consideration the money we've spent/value we've added and be offset as such, so we don't share that added value with the H/A. Our mortgage and rent combined is £400 cheaper than our private rent.

I've no worries at all about reselling, it was the 12th shared ownership one we'd gone in for, it was so hard to get one. We only got ours when the previous buyers failed to get their mortgage at the last hurdle.

Compromises we had to make were moving further out than we'd planned, and almost all we looked at were on or on the outskirts of council estates which means a mix of people. And knowing we'd have to do work to it (cosmetic but a lot) but then we will be here several years and if anything big/structural arises that's not our problem, it's the H/A. With Brexit and the uncertainty of the market we felt like it was a lesser risk right now too.

Top tips: get your MIP, proof of finances etc and IDs verified first, this saves you time.

Out of the five different housing associations the 12 houses we tried for, only one worked in a way were all applicant put in their forms by a deadline and they were all assessed then chosen- the rest came down to first come, first get their paperwork in. H/A will only process one application at a time and once that's in, unless there's an issue which is rare, you've already lost it.

This said, the home owners do have some sway- we managed to woo most of the owners and they all informed the H/A that if the applicant failed they wanted us next in line. This is how we got our house. They promised us to be next if anything fell through, and as I say right at the last minute one did, and we got it. but that was 4months between viewing and getting the phone call to ask if we still wanted to go for it.

Some of the H/A will send their "affordability" forms, then you send them back and someone looks over them then calls you to stress test. Unless you pass this you can't view the house. Which wastes more time. Save the forms, have them filled and ready to ping back the minute you get that email to say a house is up for sale. Else you have to refill every single time and it's a bloody ball ache.

Sign yourself up to the website and get notifications for the houses in the regions you'd like. You really have to be on it.

Oh and they'll only use approved financial advisers for their stress tests etc too. Save time by finding out which ones near you are, then go ahead and get started with them so that you can look at the 'normal' market at the same time but if you do spot a S/O, you're already half way through the formalities as you're ok'd by the right guy before anyone else.

That's all I can think of, best of luck!

I looked at shared ownership and could have had a snazzy new build. Instead I bought an absolute dump of a flat on a short lease and haven't regretted it. The lease has been extended and we are slowly doing it up all for my benefit not to share the benefit with someone else. The price rises are all mine to not to be split and shared.

We had a SO house. We had to ask to change the windows but obviously they wouldnt say no as they benefit as well. We never asked about a new kitchen or carpets, we just did it. Apart from paying them rent we never had anything to do with the HA until we sold it. It was a bit of a pain as we had to let them have 8 weeks to find a buyer and they don't exactly try hard, then we were free to market like any other house and we had a buyer straight away. He had to be approved and the HA took 3 weeks to do their checks and wouldn't be hurried, we lost out on a house because of them but we have a better one now so it worked out but they did get on my nerves.

We had a 30% share so deposit was nice and low. It was like owning our own house and after the problems we had had renting and the constant moving, it gave us stability and we were in it for nearly 6 years.

I'd do it again if I had to.

Thanks for all the replies. I am quite keen on it but OH isn't too sure because he thinks we won't be able to decorate or anything but I don't think that's the case? Also he thinks pets are going to ne a big no no too. I guess it is something you have to discuss with the HA it's with?
Also, we are looking at a house not a flat which I think a lot of flats seem to have the shared block downside.
There is not a lot of info so I appreciate the help

Neither an issue. It's your house. Literally the only thing the H/A care about is preserving their share. So they'll approve almost everything that will add value/maintain and improve. When I phoned to ask them about replacing kitchen and bathroom I'd expected them to want to see plans etc ... he literally asked me to wait a minute... I heard him ask someone else and then he said "yeah that's fine crack on" !

They've no interest in being in contact with you... or dictating what you do in your home. I think it's a good way to get on the market. I was sick to death of the uncertainty of renting and it's been a great solution for us.

Just so your dh knows- we've decorated every room from new skirting, paint and flooring, adding of rads, new kitchen/bathroom/downstairs wc, fitted wardrobes and in the spring a summerhouse and fake grass in the garden. We plan to get some kittens next xmas when life has settled. Permission wise that above phonecall was all that's needed.

Best of luck. Hope that helps! If you can get normal mortgage in an area you want go for it, but if not S/O is worth a look.

Thanks bongos it does!
I do wonder what happens if there was any damage? I mean obviously I wouldn't deliberately cause any but like in our current rental, my cat has clawed the carpet up. If you were going to move out and there was damage like that, in a rental they take it from the deposit. Just say you were going to leave it as it was, or even something worse like you somehow managed to get a dent in a wall (as happened in our last place during heavy handed removal men!), would that be something that would affect the value to take it off of your share? I am absolutely clueless about house sales in case it isn't obvious! I have sent over an initial form to a HA today who will get back to me about deposits etc. We aren't really in a position to move until this time next year but they said to send it over for an idea.
I am really selling it to OH on the staircasing element at the moment and he says as long as you can do what you like in there within reason he is happy to consider it. He did say what happens if we want to knock down a wall to make a bigger room? I was like well if we buy a house with big enough rooms in the first place, we shouldn't need to worry about it! It is a limitation as far as I am aware, but I don't actually know anyone who has done that anyway, so it seems a bit silly to discount the whole idea on a hypothetical issue that probably isn't relevant anyway!
I am excited about this whole prospect now :)

RE damage- to the extent you are talking about, no basically when you sell.. the house is valued as is. That number is split between the shares as is current at that time (as a pp mentioned I recommend buying no more than half unless your buying all) and that's that.

Again for reference, when we moved here, they'd clearly let the kids swing on the bathroom sink so it was hanging off. There was playdoh squished into the carpets and the flooring in our bedroom is soooo scratched and damaged. In general the house was generally a bit shit.

But big. Incredible views. It's been so worth it. Now we have a home exactly as we want it, in a nice enough area (the areas sought after but we are on the side of a councul estate sadly but to be honest all our neighbors are lovely) but we won't buy more than our 50% so we can guarentee a quick sale in future and keep our payments low.

The rules on S/O have recently been widened out to make it easier to get a follow on buyer and to get a mortgage. There are only 4 of the High St banks that don't offer a s/o mortage now. Also you can earn up to £80K (household) and the need plus 1 for the number of bedrooms has been scrapped , along with the local occupancy clause....
Damage is the home owners responsibility as are maintenance & repairs...
Standard leases can be found here section 1 shared ownership part 11 model leases.

Thanks for the replies again. I have heard of keeping it reasonably low in the share percentage or go full whack for resale purposes.
I also wonder if as far as possible it is best to think really long term when buying. I mean we don't plan on having more kids so 2 bed is fine, but if we were planning more then would going for 3 beds off the bat be a better plan?

The first tranche has to be between 25 and 75%. The minimum amount you can staircase is 10% each time - you will need to pay for a valuation each time and there are legal fees. The rent will be up to 3% of the remaining equity (amount owned by the HA), with most at 2.75pa%.

What you will need to do is check how much your 2 bed and 3 bed properties are valued at. Check you can buy the minimum 25% and then play about with the numbers to see what you can afford.

Hi OP

Thanks for posting, all the info is really useful.

We are FTBs in London and have tried to get a few SO properties but have always lost out to somebody else.

Each viewing we've been to, there have always been others there to look & owners have said that there's been a dozen or so viewings etc.

I don't think selling on is an issue, from what we've seen. The problem is more getting hold of one in the first place!

Even living & working in the borough isn't enough.

I've just been approved for a 25% shared ownership for a lovely new house. The bit that worries me is the rent rises in line with the retail price index. I'm worried it could eventually take me to a level I might struggle with. Also the monthly service charge is quite low, can that be hiked up significantly?

I bought a 35% share with one of the biggest housing association and although my London flat is really lovely and more than big enough, the housing association is a pain to deal with. You have to pay a high service charge and they can be very slow at doing repairs in communal parts and dealing with problems.

Also, be mindful of the current cladding scandal which affects a lot of new-built properties, including shared-ownership flats.

You could end up with a costly bill to pay for the removal of any cladding that might be identified in the future. Housing associations are struggling with the new fire safety regulations and having to inspect and do work because they literally own/manage thousands of properties.

There are positives about shared-ownership but many pitfalls as well.

I would get a shared-ownership house if you can rather than a flat and be very careful about what housing association you choose.

This is a detached house so no communal areas or cladding to worry about thank goodness. The service charge is £35 a month which is ok but I am concerned about that increasing hugely and also the rent increase pushing beyond budget. It's all a minefield!

I've just sold my shared ownership flat. If I had my time over, I wouldn't got for SO: you have no control over a lot of things such as the cost of repairs and when they are done. My flat doubled in value very quickly but this meant I couldn't ever afford to staircase up. Selling it was difficult: the freeholder put no effort into finding a buyer so eventually it went on the open market.