Shared ownership, good idea ?

[sunshineandshowers87]

I'm wondering if anyone on here has bought their home through a shared ownership scheme ? Is it a good idea ? How do you go about owning outright in the future ? I'm not sure why but part of me is thinking it's to good to be true.

Me and my husband have been trying to save for a mortgage for 6 years but because of rent rates being so high we are not getting very far , it's looking like shared ownership maybe our only option but it makes me nervous .

I wouldn't even consider it. It's a recipe for disaster.

If saving isn't going well, then you might as well. When you want to buy more of the property/buy outright, you'll just let the HA know. Whilst you only own a share, you need to pay rent on the rest + your mortgage interest will be higher on a SO property. So it works out better than 100% renting but it isn't as good as buying on the open market.

I’ve had a very positive experience with shared ownership.

It meant we could move into a lovely house that suited our needs and the combined rent/mortgage was much cheaper than private renting. Identical properties on our road were privately let for £250 more per month. Plus we had the security of knowing we wouldn’t be evicted or any of the other downsides of privately renting.

Buying the property outright and owning the freehold was also an option. You could buy further shares or simply buy it all at once.

However we didn’t take up that option and sold up after a few years due to relocating. Selling was very easy, managed to sell through the HA website within a week so no estate agent fees. House prices has risen a little so we gained a bit of money on our share plus had the added equity from the mortgage payments over the years- so came out better financially than if we’d just privately rented.

We now ‘properly’ own a house and this wouldn’t have been possible if we’d not gone down the s/o route.

Of course buying outright is probably better BUT if you have no choice than it works out better than privately renting for a lot of people!

Maybe you could do a search, this was being discussed literally a few hours ago

In general, buying on the open market is better than SO, buying second hand SO is better than buying brand new SO and THAT is shit loads better than private renting.

Christ people who leave a negative comment with nothing to back it up. My son has had a great experience and like pp mentioned without 0this opportunity he wouldn't have been in this position now or to eventually move on to an outright buy. You also DON'T get a higher mortgage rate. Get all the info and see how you feel.

My friend's daughter bought a one bedroom flat in London and lived in it for 3 years. She owned 30% (I think) and when she left she'd made £30,000 profit.

My son's paying £600 for a room in a shared house in London. His girlfriend is moving to London and will pay the same. Shared ownership of a two bedroom flat in their neighbourhood will cost £1,100 per month all in. They'd be crazy to carry on paying rent when they could part-buy.

I think it works well and I know people who can buy / rent for less than normal rent .. I think pp poster didn't understand that it's trough a company and not a freind etc ... go and look at new builds and ask questions ..

Thank you so much for all you advise

I have 2 friends who have bought through shared ownership and it seems to have worked well. They both have lovely low maintenance family homes and are managing the budget.

We bought an SO house 2 years ago, new build. It was the only way we could buy as we just couldn't save up a deposit while renting. We have a 70% share and we plan to go to 100% in a couple of years at which point it becomes freehold.

We absolutely love it as it meant we could get a foot on the ladder and live in a house large enough for a family. We have had zero issues with it at all and going by what the other properties on the development have sold for we should make a bit of money when we sell (this isn't a priority for us as we wanted a home not a money maker but obviously we don't want to be in negative equity).

It is so so much better than renting. We have complete control over decor etc and we are building up equity which means that our next house will be bought 'normally'. We don't have to move every year or two like we did when renting. Best decision we ever made.

Obviously if you can buy 'normally' then do that but if it's between renting and SO go for SO.

I am amazed when these posts come up that important and pertinent facts are omitted.
In the vast majority of cases service charges can be crippling. They are uncapped and unregulated and can rise after the first year or so by over 100%.
Many new builds are sold with onerous ground rent terms e.g. compounded rpi. Many people are trapped and unable to sell their homes due to these ground rent terms in the lease. This is because solicitors advise against such terms and mortgage companies will not lend in many of these cases.
Apart from that the standard - certainly now - of New Builds, can be very poor leading to years of battles and problems trying to get sorted.
Perhaps these problems were less in the past. However they certainly exist now.
Anyone thinking about shared ownership needs to do lots and lots of research.
Oh - and NEVER use the developer's recommended solicitor- no matter how many incentives you are offered to do so.

It depends, find a good HA, a property built by a "good" developer (at least 1 that isn't a complete cowvoy). Read the contracts thoroughly. Make sure you're in an area where house prices are quite high, therefore good demand for affordable housing.

I'm in SO in the South. We couldn't get a mortgage for a 2 bed property outright, as we were on early career salaries. We bought a 3 bed SO at 50%. Combined mortgage and rent is less than private renting similar in the area. Our service charge minimal monthly and we don't pay ground rent, just rent on the 50% we don't own. Our rent increases are quite high at 5% per year. But we're getting new contracts to lower this soon.

SO works for us because our salaries are climbing and we should be able to afford 100% of our property in the next 5 years easily, or be looking to move. We have sufficient income at the moment to cover changes in interest and rent increases (even at the less favourable rate at the moment) for at least 5 years without any salary increases. This means we can very comfortably afford it.

Never buy a SO house without 100% buying power and the freehold on 100% ownership.

We didn’t pay a ground rent either just the rent on the share we didn’t own which was fairly priced in line with how the Housing association priced their fully-rented properties- any increases in rent would mirror all properties rent in the housing association including the full rentals.
The service charge per month was minimal and worth it. I also know people on developments not SO or leasehold that pay a service charge?

In my area at least it is very easy to sell on a SO property, they generally go much quicker than ‘normal’ homes.

That said I am limited to my own experience and the housing association being decent. I’m sure the people with negative experiences do exist so that is worth looking into

Sorry yes I should have said that we are with a good HA with no ground rent and capped service charges. The building company were also good and we are very happy with the quality of our new build, lovely high ceilings and spacious rooms. Few settling cracks which we were expecting and are getting someone in to seal up next month.