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Original poster

We earn too much to be able to get a shared ownership property

68 replies

Whatdowehaveherethen · 26/08/2020 01:46

Our joint income is £82k per year before tax. This (to us) is a lot.
We've spent the last 7 years moving from rental to rental across the country to improve our work prospects. At the end of last year we were at a stage where we could afford to buy a property using the shared ownership scheme. We were in the process of looking around when the Rona hit.

Luckily for us, our employment is secure. That said, we have spent the last 5 years or so clearing previous debt and upping our credit scores.

This takes us to now. Our debts are within 3 months of being cleared. DP has just been given a promotion. Brilliant news, I know. However, his new earnings take us over the limit allowed for a shared ownership property in the areas we would like to live.

We would now have to keep saving for another 2 or 3 years to be able to buy. DP has even considered asking for his pay to be reduced temporarily but it's not possible.

I know this is a first world problem but we've moved so much in the last few years to the point where our sons have different regional accents.

We were really looking forward to being 'at home' within the next few months.

Again, I'm more than aware that there are plenty of people in a worse position.

Its just all a bit shit.

OP posts:
Elmo230885 · 26/08/2020 09:16

It's very difficult for people to offer advice on threads like this as there are too many factors involved.
An income of £82k would buy you something amazing where I live (rural town in Lincolnshire) but I'm well aware in London it's probably not going to get you anything decent.

dollypopy · 26/08/2020 09:42

Maybe they don't have a deposit?

Takingontheworld · 26/08/2020 10:07

Surely the purpose of a SO scheme is to help those on a lower income get on the ladder. Struggling to understand your point to be honest. You earn a very good wage. Just buy normally?

Ariela · 26/08/2020 10:14

@dollypopy

Maybe they don't have a deposit?
I imagine not, as say still have debts to clear in the next 3 months. Their focus should be to clear those and save as much as they absolutely can.

Look on all the money saving forums for advice, check out what you can cut out and make sure you are saving absolutely every penny you can. So no holidays, no eating out, no takeaways, no newspapers magazines or books, no new clothes unless 100% essential, no cinema, walk don't drive, shop at a cheaper supermarket, shop about for cheaper utilities, cancel subscriptions etc.
Only a temporary measure but if you do all that you can really save.

When I bought my first house I was working 4 jobs (ok maybe not 4 jobs available to be had now) but I wasn't earning the equivalent of your money even with 4 jobs. I also did not spend, and I did manage to save a lot.

SciFiScream · 26/08/2020 10:17

I think you put too many eggs in the shared ownership basket and now that option has been removed you are struggling.

The option has been removed for good reason. That's a fantastic joint income. Really fantastic.

My DH and I got on the ladder at a very expensive time (peak of the market) in a very expensive city with no help from anyone and no schemes to support us with a joint income of less than half that.

@HogwartsForever11 - love to know how you got that offer? Could you signpost us to your broker?

HogwartsForever11 · 26/08/2020 10:22

@SciFiScream Sorry, realise reading back what I've written is misleading - house was 360k but with a 60k deposit, so only a 300k mortgage.

FizzyPink · 26/08/2020 10:24

Why would you want to use shared ownership with those salaries anyway? I’m just outside London and all of the ones I’ve come across seem to charge an extortionate amount of rent on top of the mortgage you’d be paying on your share. I’ve played around with some of the calculators and it seems the higher the share you own, the more you end up paying as the rent doesn’t decrease by much but obviously your mortgage will increase.
I really don’t understand why they’re seen as a good option to take when in a couple of years you could own a house outright and not be paying rent as well as your mortgage.

JoJoSM2 · 26/08/2020 10:28

If deposit is the issue, you could go with help to buy although it’s a bit unlucky that it can only be used with new builds.

dollypopy · 26/08/2020 10:37

If you earn 80k you can often borrow 4.5 x your salary which is 360k. I know someone earning 100k who borrowed 5 x

pinkpepperclove · 26/08/2020 11:11

@intheningnangnong

Shared ownership is often a bad outcome. People rarely manage to step up
Nonsense. I bought a 50% stake and made £150k when I sold.

As long as you aren't buying as a short term fix then you can make money and step up the ladder. It was my first home and I wouldn't be in the position I am today without it

pinkpepperclove · 26/08/2020 11:13

Why not look at shared ownership with just one of your salary's and build up from there...

BikeTyson · 26/08/2020 11:16

It’s only a short setback which will put you in a much better position overall. A couple of years hammering savings to get a deposit and you’ll be able to buy without having to go through a SO route. Better to avoid it if you don’t need it and on that income you don’t need it.

WombatChocolate · 26/08/2020 12:15

Op, definitely need you to return with more info. Otherwise this is just rather provocative!

Where are you?
What deposit do you have saved?
What are you trying to buy?

As others have said, you have a good income and should have access to a good mortgage allowing you to buy.

Most people with your income would do far better to buy without SO assuming they have some kind of deposit. SO always costs more in the long run than buying without because of limits on who you get mortgage with to the ost liver options, hefty staircasing fees and costly rules and regulations when you sell on.

If the issue is that in clearing your debts you haven't managed to save a deposit, then consider how quickly you can save a lump sum once you are no longer paying off debts. Sometimes you just have to wait until you can actually afford the the thing you want - and the irony might be that at higher income, it takes a bit longer to save the larger deposit needed not to do SO or Help to Buy.

Requinblanc · 26/08/2020 15:37

Do not buy into shared-ownership.

I made the mistake of buying a SO flat in London. There are constant problems with high service charges and the housing association (the freeholder) not doing repairs to communal parts. The rent you pay keeps increasing every year and now we are caught in the fallout of the cladding scandal as so many new-built properties have been put together with shoddy, flammable material

Stay well away from these schemes at the moment.

intheningnangnong · 26/08/2020 15:49

@pinkpepperclove you may have had a good outcome, but I can tell you as a fact the structure of these deals can inhibit growth and the sale value can be loaded to the other party. Just because your contract worked well that is most certainly not always the case.

lovib · 26/08/2020 16:00

I think they are a bad idea. Different if you did the scheme 10 yrs ago when prices doubled but those days are pretty much gone.

ShellieEllie · 26/08/2020 18:44

Is it more a case of you can't get a mortgage for the type of property you've set your sights on?

Original poster
Whatdowehaveherethen · 26/08/2020 20:48

I realise now that it is wrong to suggest DO has his pay reduced. Sorry.
Our income was significantly lower just last year and I guess that for a few years we thought 2020 is when we can buy. Our deposit at the moment is £15k which was perfect for the shared ownership properties we were looking at in and around Kent.

I'll stop behaving like a petulant child and just keep saving. I suppose it will take less time to save with our current income and we can buy a 'whole' house instead.

I now can't believe I considered what I did. You're all right. Very selfish.

Thanks for the kick up the ass Smile

I'll have a look at help to buy too.

Thank you all again.

OP posts:
Original poster
Whatdowehaveherethen · 26/08/2020 20:54

@WombatChocolate

We're in Kent and want to stay here but hopefully closer to the Sussex border where DP works.

We've got £15k at the moment. I know it's better to clear debts before saving but we wanted to not start from £0 if that makes sense and our debts were all transferred to 0% credit cards.

We would ideally like a 3 bed house with 2 reception rooms and a decent sized kitchen and a garden big enough for an outbuilding for DP so that I don't have to see him all the time 😁

Our options were quite limited when looking at SO especially with garden sizes and I can't stand open-plan homes.

I think this is a blessing in disguise really!

OP posts:
Babs709 · 26/08/2020 21:02

I can understand your disappointment, I like to have a long term plan and hate it when one of my ducks gets out of the row. I’m glad your replies sound positive, just a case of forming a new plan! But you’re still allowed to be disappointed that home ownership has moved a little further away.

Lily7050 · 26/08/2020 21:42

In my experience SO is difficult to get. I was registered but never heard from any SO organisations.
Ended up with Help to Buy, which is better in my opinion.

Original poster
Whatdowehaveherethen · 26/08/2020 21:49

@babs709 thank you. I am trying my best to accept constructive criticism!

OP posts:
Original poster
Whatdowehaveherethen · 26/08/2020 21:56

@lily7050 I think what makes it more annoying is that we were successful with a house off-plan but that was days before DP had a significant payrise which made us ineligible if we had continued.

I've ashamedly been blinkered when it comes to negative stories about SO. I quickly skip over them in the news. We bought a flat using SO almost a decade ago and we made a tidy unexpected profit when selling. Of course, it was all swallowed up with all the renting and moving we've been doing since.

OP posts:
FlamingoAndJohn · 26/08/2020 23:14

We would ideally like a 3 bed house with 2 reception rooms and a decent sized kitchen and a garden big enough for an outbuilding for DP so that I don't have to see him all the time

That sounds like a second house really. You are aiming too high.
Go for a smaller starter home. Compromise. The house you want is the next step.

Original poster
Whatdowehaveherethen · 26/08/2020 23:43

@flamingoandJohm do you really think I'm aiming too high?
I know an hour or so of research isn't excellent but if we really tried we could save an extra £100k over the next 3 years for a bigger deposit and looking at the houses we could buy now if we had that, it would be within our means.

Again, I've only been researching again in the past hour or so and I'm by no means clued up when it comes to this stuff.

I've done some calculations and if we were frugal enough we could save just over £100k over the next 3 years. Assuming house prices are the same, I think we might be able to afford to buy something fitting our requirements? Again, I'm new to to 'whole' house buying as of a few hours ago so I'm happy to be corrected 🙂

OP posts: