Shared Ownership

[iamfleabagandclaire]

Property in my area is much sought after generally, particularly the old/historic/pretty houses. In our village is a new build estate that has been done in a style sympathetic to the surrounding area. However they aren't selling quite as quickly as the builder hoped and the remaining properties are being offered on a shared ownership basis. There is one house in particular that I've fallen in love with a little. It's the perfect size and layout and due to a quiet in the location has an enormous south facing back garden. It would be a house for life for me and my young children. I have the deposit for the 25% share, can get a mortgage easily for that % and I can demonstrate I can afford the rent on the other proportion. I'm filling in all the forms today to register my interest ready to go when the Covd 19 pandemic allows house purchases again. Can anyone fill me in with their shared ownership experiences please? Good, bad, I different? As I've said I don't expect to move again for at least 20+ years and I currently rent so nothing to sell. My plan would be to buy more in due course. I work in a job that's as secure as it can be unless I made a major major error and was struck off. Thanks for any experiences you have

I only know 3 people who have done shared ownership but they are all really happy with it. It has allowed them to afford the size of house they want, in the area they want. One couple who had to move areas due to work, were able to buy a non shared ownership home in the new area due to the equity they had built up. The other 2 are still in their homes but over the years have reduced the rent by owning more.

Thanks @Els1e that's reassuring to hear. This is exactly my situation, I could afford the size of house I need for my circumstances in a lovely area that I otherwise wouldn't be able to.

Never done it myself but sounds like a good option for you :)

Sounds like a good option for you but just check if there are leasehold and service charges on top of the mortgage and rent portion.

Pros are the ones I'm sure you know of, the biggest and most obvious being affordability.

Cons are:

• You're responsible for all maintenance of the property, even though you only own a small percentage of it
• Can be difficult to staircase if your salary doesn't increase/you aren't able to save much
• Your rent will go up, probably yearly, and your service charge will do the same
• New builds are usually priced at a premium so you're probably paying at the top of the range for the area

I've been in one since 1998, 50 % share, it's great. The rent has gone up over the years but is still cheap.
I love the location, have parking for 2 cars. I could now potentially afford a whole house but I really like this one!

Definitely research your stamp duty liability for when you stair case!

Good luck. Hope you get the house!

I've got one OP and I only pay for internal maintenance- not buildings or structures. I managed to get a four bed (3 kids plus me) and I love it!

As I understand it, you can also staircase by remortgaging when your equity increases? That's what my friend who has a shared ownership house is planning to do, anyway. Sounds great and hope you can get it. Got to be better than owning nothing, anyway.

Thanks everyone. No horror stories which is reassuring. Ex has stopped paying his maintenance and will be months before CMS will even start doing anything about it so I need to sit and work my finances out before the next steps. Trying to not build my hopes up too much but I did have a sneaky drive to the house on my way back from work the other day.

Good luck op. It's not perfect and yes there can be downsides but it means security for me and my kids and even if I never fully own it, I can be chucked out and I've got a 4 bed house £400 a month cheaper than I was paying when I privately rented! Good luck and fingers crossed!

Can't be chucked out!

Our house was a shared ownership. We purchased 60% of it and eventually staircased to full ownership.

For us, it enabled us to get on the housing ladder far quicker and buy a house in a desirable area which we wouldn't have been able to afford without the scheme.

The rent was pretty cheap for the remaining 40% and the monthly fees were only about £20 a month which included buildings insurance. When the rent did go up, it was usually only a few pounds a month.

Now we own the house fully, we own the freehold and we do not pay any monthly fees. The equity in our house is around £40k, so we will either use that as a deposit if we decide to move, or towards an extension.

I would recommend shared ownership, it worked really well for us. The people who it doesn't work for usually aren't intending to stay in the property long term or aren't aware of the costs involved.

The only annoying issue I found with it, is when staircasing you obviously have to go through all the paperwork again, so instructing a solicitor, paying mortgage fees, you have to pay for all the searches, pay for the housing associations costs as well - so it adds up. It's better if you intend to staircase to do it in one go, rather than multiple.

Also once you own any % of a shared ownership property, you are no longer classed as a first time buyer - so when you staircase (assuming the initial cost is below the threshold), you have to pay stamp duty - even if the total house value is below the stamp duty threshold