Does anyone buy with shared ownership?

[Ris26]

I need more information about shared ownership. My husband and me are looking for flat to buy. We can't afford to buy full price in London and one friend suggested me to look fot the option shared ownership. But I don't know how it works. Had anyone bought recently in London? For example let say for 2 bedroom flat around £450k full price. If we want to buy 50% who is the other owner. How much it will be the mortgage rate

We did this several years ago and are now selling that property. We bought 60% of the £160k flat and the remaining 40% was owned by a housing association to whom we paid rent. Later on we inherited some money and paid off the rented portion.
Main thing to be aware of is that in some cases - if it's a housing association for example - you would have to go through them when selling, and it is a different process to selling on the private market and can take quite a while. In our case it worked well and enabled us to buy a good property very affordable.

I bought my shared ownership flat in Greater London 10 years ago. I initially purchased 50% and paid rent to the housing association on the remaining 50%. This was before the crash and then property prices dropped and luckily my salary went up, so I ended up purchasing the remaining 50% for less than it was originally worth. (Around 15% less).

I have to say looking back it was the best decision I ever made. (Although at the time everyone told me I was making a mistake!) It has allowed me to build equity and has funded my next property which is a 3 bed semi.

My only advice would be to aim to purchase the remaining share whenever you can afford to. You have more options when you own 100%.

The housing association who the property is with makes a big difference. I was lucky with a decent one and hence it has worked out so well.

Good luck!

purchased 2 bedroom flat in Greater London 2003,50%
now buying the rest,price more than double.
Try to aim to buy 100% in future and paying rent is not bad as well,rent still cheaper with housing association.
for 225k mortgage at around 1100 plus 350-400 rent plus service charge 70 to 120
advantages:
getting into property ladder and then move on to full price properties
less financial pressure
you can purchase more percentage as you go along
you can buy in more premium locations
housing association are responsible of maintaining the outside of property including windows from outside(flats only)
own 100% you can sell in open market with no fees payable to HA.
cons:
even you are paying percentage rent you are fully responsible to maintain the place(internally).
service charge can be steep,especially building with lift(houses excluded).
if you sell you have to go through HA(up to 12 weeks then you can sell it yourself)you end up paying fees around 3%
regrets?..only i did not buy a house instead of flat,i hated the service charge.
overall,best thing i did financially in my life.
questions do not hesitate.

#mumsy27 Do you pay £1100 only mortgage rate plus 350-400 rent plus service charge? So it's around 1600 monthly or 1100 all together? How they calculate the rent of the other part of the property? Also what about the selling the property after few years?

Purchased 2 bed 1 hour from London 11 years ago 30% from a lovely smaller housing association. Paid about same in rent as we would have for similar property outside the city, but we had a much better location. After a few years purchased 60%, then 100%. Sold on open market shortly after. Purchased 3 bed terrace 3 years ago. Now about to purchase 3 bed semi with 35% deposit.

All made possible with shared ownership. We started with £6,750 deposit. Now we own a third of a 3 bed in one of the most expensive areas of the country. We’d never have been able to buy it without this route. I’d say household income only went up £14k from buying 30% to 100%.

So we are a success story and I have promoted the product to plenty of people I know who’ve also had great experiences.

As a general rule of thumb you’ll pay less for mortgage & rent in SO property. But probably have a better property, in terms of build and location. This is certainly true of where I live. It is a great value for money option to rent help you build up equity- renting 100% of a property is dead money unless you’re lucky enough to have secured a social housing tenancy.

on standard you pay around 2.75% rent on the unsold equity for rent (could be less but shouldn't be more)
so if you were buying a 50% share of a 200k property you would get a mortgage for 100k and pay whatever monthly cost that is for you, then you pay the rent portion which works out at 229 a month for the other 50% share.

Things to be aware of- you are responsible for maintaining everything in/ outside your property; it’s likely to be leasehold especially if a flat; you will have to offer it back to someone on the list if you don’t own 100%, you will have to pay for independent valuation and sellers pack if you want to sell, you will likely have to pay service charge and ground rent; you may only be able to staircase to 80% in certain developments; your household income must not exceed £80k; you cannot sublet the whole property (room is fine); some lenders won’t lend if you own less than 50%. Stamp duty I think is free. You must be a first time buyer. You need to register with your local homebuy agent (easy, do it ASAP).

hi , for the housing associations ive worked in - u don't need to be a first time buyer just at least show you have your current property under offer and the salary limit is 90k if youre in london

I know one person who bought a SO property, and he was never in a position on his salary to purchase the other share.

He put the house up for sale many times and took 5 years to sell.
Being SO really put people off. It looks a good move if you can afford to buy the remaining share before you intend to sell.

you will have to offer it back to someone on the list if you don’t own 100%

It depends on the HA, mine was sold via an estate agent on the open market.

Mine sold to the first people that viewed it after it had been on the market a few hours. As with anything the right property will move very quickly.

Based on your £450k valuation,you have mentioned you buying 50% £225k that will be at around £1100 mortgage payment( anyone correct me if I'm wrong)
Plus at around £400 rent for remaining 50%
Plus £70-£90 service charge
Total :£1590
Rent is calculated at around 2-3% and increases using RPI.
In my case(flat),they are responsible of maintaining windows from outside, roof, communal area.
To purchase more isn't complicated too.
Buy more share,you get to value it by their chosen surveyor( they are independent and fair) cost at around £250, application process around £200-250
Selling it( you own 50%) pay for valuation,selling fees 2-3 % of selling price
Usually they can find people to purchase. after 12 weeks it's over to you selling it at price you wish.
Or if you wish to sell 100%(own only 50%)
It is called back to back, basically buyer buys 50 from you and 50 from HA.
Or you purchase the remaining and then selling the property on open market (usually after 3 months after buying full percentage).

Stamp duty isn't necessarily free- you'll need to be sure you both qualify under the first time buyers exemption.