Shared ownership, your views

[8mileeminem]

Hi so me and exdp are splitting up and we are selling the family home and going out separate ways. Dd will live with me. I've seen a mortgage advisor and as I live in an expensive area I can just about afford a 2 bed house for us on my own. But none of them have parking which I would ideally like. There are some brand new build shared ownership properties that I've looked around and I really like them. I'm worried about which option to take. Is it best to go for full mortgage or keep monthly costs low and go for shared ownership? What are your experiences of this? Would you recommend?

You still have to pay rent for the portion which is not owned by you - but you are responsible for 100% of maintenance. Look closely at the figures for mortgage + rent. There may not be much difference. Read the small print and get-out clauses that are not in your favour. If you can afford to go for full mortgage, then this is likely to be your best option.

We looked for DD and found the rent to be high for the non owned portion. I would avoid and suck up the parking problem.

Thankyou for the replies

Definitely don’t do shares ownership if it’s just over parking.
They are ok if it’s your only option but seems like there are other sacrifices you can make. They usually work out ok if you can stay in them a long time and the markets work in your favour but they can be a ball and chain.

If there is a way you can fully own then I would definitely go for that. You'll probably be paying a highly marked up full price as they are generally new builds. There are shared ownership houses near me with the 100% price of 330k, whereas you could pick up a similar second hand home for 270k ish. so even if your share costs you less it's worth checking if it really would be worth the full price.

We did shared ownership about 2 years ago and it was a great way for us to get on the property ladder. Bought in SW London in 2012 for a price of 285k and sold in 2016 for 395k, so even owning 40% we tripled our original 25k deposit.

Having said that, the property market if very different now. Also, if we had just bought a flat to fix up instead of our shared ownership new build, we'd have made a lot more money in the price boom. I guess that can go both ways though, because in a falling market you only have to absorb a share of the losses.

It was a good decision for us because we needed to be somewhere that was completely turnkey as we were expecting twins. It was a great little property and sold the same day we put it on the market, so my experience was very positive.

I am shared ownership. It's worked for us as we couldn't afford our right in our area. But I think in the long run if it's just parking a problem I'd buy outright

I'm booking in tomorrow to view outright houses. Many thanks

Can you not use the Help to Buy scheme instead of shared ownership?

Many shared ownership companies have a list of criteria you need to fulfil to qualify (like being a first time buyer is quite a common one) we have a shared ownership and it works for us because we wouldn't have been able to buy outright for what we needed. But if you do decide to go down the shared ownership route just double check you meet the criteria before you go view!

I ha SO for years. If you can afford to buy outright do that.

I'm about to exchange on a SO property in the South (3 bed new build. Full price just shy of £400000 - we're going 50%). My OH and I are both FTB. We couldn't get on the property ladder any other way. 2 Bed "out right" ownership are upwards of £300000. We can't mortgage for that on our combined salaries.
SO is working out £100pcm more expensive than staying in our current 2 bed detached rental. Worth it for an extra bedroom and to future-proof us (currently no DC, but accidents happen and we're early 20s).
The most important thing for us is that our salaries are going to increase as we're both currently in graduate positions in technology. We would not enter SO if we could not staircase to 100% or sell up and move to a "full ownership" within 5-10 years.
You do not want to enter SO if you cannot staircase soon. The people with the worst experiences are those that are "stuck" with their share.
If you can afford to buy a big enough place outright now, do. Especially if, after mortgage payments, you can still be saving. You can always look to move again when you have saved a bit more and can afford to in a few years to get parking.

Avoid shared ownership like the plague....but if you could find a shared equity scheme then you may find what you're looking for

As Clueless illustrates, SO has its place. Certainly when I bought my SO flat it was the only hope I had of getting on the property ladder. And when I sold it 15 years later I did get a reasonable deposit to buy my house.

But I could not have staircased even if I had wanted to - I simply couldn't afford to . My flat was in London - it sold for £100k more than the house I purchased out of London.

As an alternative to renting, SO has a place. But do look at each scheme carefully. I was looking at some bigger SO flats to buy but I was put off by £300pcm service charge. Reason i was so high was that many of the SO flats in the same block paid only a fraction of that as a SO (via the council). Utter sham of a system - look at all the fine print.

If you can afford to buy without going SO I think that is better every time.