Shared ownership scheme - anyone had an experience of this

[Monkee4]

After separation I am looking to buy a house but cannot afford anything nice. I was wondering if anyone had any experience of the govt shared ownership scheme? Good or bad?
On paper I think I qualify - although I am an older buyer

Shared ownership isn’t the government- it would be you buying a share of a property from a house builder, usually a housing association. There is no “catch” but they’re not for everyone. You’ll have to pay rent on the portion you don’t own. You can buy more of the property as and when you can afford to.

If you can’t afford to buy it’s a good option. But you’re investing with a company so be aware that you have to deal with them, especially if you chose to sell usually, they’ll set the sales price and find a buyer. You have to give up a bit of control.

Thanks sprinklesinmyelbow so they can decide how much they buy it back from you should you want to sell? They therefore get to make a profit on your house sale - even if have bought all of it by then?

I had a share ownership house from council years ago. started with 25% Each time bought another share house was revalued. had to pay rent for share i didnt own. Paid full stsmp duty at beginning on lowest value so didnt have to pay again. finally sold when i owned 75% was easy to sell as cheaper than other houses for sale in road

Hi monkee no if you own 100% they’re out if your life. If you own less than 100% and want to see they will sell it for you (they’re unlikely to buy it back themselves- they’ll
Just sell your share to someone else)

Thanks - that sounds ok. Good to know

The affordability criteria for shared ownership can be tighter than getting a mortgage- they went through everything with a fine tooth comb. If you don't buy the other share, when you sell they set the price with no room for negotiation.
It worked well with us as our situation changed when DH was promoted and I qualified in my field, but we didn't make anything on the house. If you're not planning on moving again any time soon it's worth considering.

Shared Ownership is very much a government scheme. Google Shared Ownership Affordable Home Ownership. It is £4 Billion Government investment for 16-21 parliament. It is built out by Housing Associations and developers but the retained equity is part grant funded and part owned by the Housing Association.
If you want a cure for insomnia then Google Capital Funding Guide which will give you chapter and verse on the whys and wherefores of funding of SOAHP
Qualifying criteria are:
Household income below £80k pa
Only property
In Rural protected areas you may need to have a local connection and cannot buy any more than 80%.

You will pay between 2.5 and 3% rent on the retained equity (bit you don't own) most charge 2.75%.

There are other shared equity products - some local authorities, developers and housing associations offer SO type products. Check the fine print ,- if it mentions Homes England or Homes & Communites Agency it is the government funded one.

I meant the property isn’t owned by the government

Monkee the HA may have a pre emotion clause where they have first dibs on buying back but the value is set by a red book RICS valuation. You instruct and they instruct the surveyors if there is a difference you argue it out. Generally there is only a minimal difference. Most HA would prefer you sold it on to another buyer.

Shared ownership is a bit of a misnomer, it's more shared equity. The property is bought on a leasehold basis even if it's a house and you as the leaseholder have have full repairing responsibilities.

Staircasing (buying further shares) is expensive because you will pay full solicitor conveyancing fees each time you go through this process.

Subletting is usually not permitted, although this has been relaxed by some housing associations in recent years.

Selling can be tricky and require open market valuations and housing association restrictions.

Not trying to put you off, if you know what you're getting in to it's a good option, but a lot more complicated than people sometimes expect.

I was in SO for 14 years. I'm glad to be out of it now but I suited me at the time. It's good if you can't buy 100%.

I ended up with a good deposit to buy my own home so it ended well.

Suss out the housing authority and remember they are in the SALES business. As affordable housing goes it's become a total joke at least in london.

Beware the service charges. Some schemes are dodgy!

I'm selling my shared ownership house currently, having lived in it for 7 years. We own 50% (with a mortgage) and pay subsidised rent on the other 50% owned by the housing association. As a scheme it's worked to get us on the property ladder, and we've made equity on the half we own. You will have to meet an earning criteria to be eligible, and you may need to have a connection to the area you are buying in. Bear in mind the housing association will be the freeholders, and you can't make any significant changes to the property without their agreement. You also can't sublet. If you want to buy additional shares (or sell) you will need to pay an for an independent surveyor to determine the current market value of the property, and that will be used to determine the sale price.

The downsides:

1. We pay a 'service charge' but they don't provide us with any services (bar sending us a crap magazine a few times a year) so it's a bit of a con really, and in reality you will be responsible for all maintenance.
2. The housing association are useless, and so slow to do anything if you need them to. Selling this house has taken nearly a year, and the housing association have caused most of the delays by not responding for weeks etc. You also need to sell to someone that they deem to be the correct applicant, and they will takes ages picking that applicant.

When buying more equity from the HA, you don't necessarily need to have a solicitor and thus their fees. My SO doesn't necessitate a solicitor until I purchase the final 15%.

There are stipulations about what I can buy though, so in 5% increments until 85% then I'd have to buy the remaining 15%.

Two friends have sold within the last year, both shared ownership. Different HAs. One owned 35%, HA wouldn't allow anyone to purchase more than 35% initially so they lost 3 potential buyers who wanted 50% or more shares. They also had no say on when people came to value/photograph the property.

The other 'sold' early December. Still no further forward due to HA holding up the process due to inefficiencies.

Both complained (as pp has) that the service charge they paid was pointless as they never received any service.

Forgot to add that not all properties allow you to buy 100% shares. Was surprised to hear that at a help to buy event we attended.

Thank you everyone. Lots to consider there. It's so useful to hear everone's experiences.

Good luck!

I found that by owning 50% and paying rent on the other half that I was paying less than if I were to be renting. It didn't or out that I was paying off much each month but it definitely served its purpose. I found I was able to do anything I wanted to the property but be wary if you are adding value obviously if you were to sell the HA would gain half of the value added.