@PinkSpring
Ok so some people have had issues but not everyone - surely if you know what you are getting yourself into - it's not a huge shock?!
We purchased our SO house six years ago, staircased a couple of years ago to full ownership, we now own the freehold and the house "normally" - made over £50k in equity already. Staircasing was easy.
I really don't see the issue here!
Honestly my experience was that most people didn't know what they were getting into on our estate.
We did. We did all our numbers and knew exactly what we were getting into. (DH has written mortgage calculator software).
We still had problems we didn't expect. The irony for us was that property declining slightly in value made it more difficult to buy, not less difficult even though our income doubled. We staircased at the bottom of the market. It didn't even wipe out our equity. We still had equity in the property. The lenders treated us differently on what they would lend us because it was a specialist issue. When we were looking around for a mortgage we had our current lender look at the numbers and say "This is insane. You are a perfect client. Under any other circumstances you'd be the first people we'd lend to, but because its a staircasing mortgage you don't meet our criteria to apply for a mortgage!!" They were shocked. We did find someone who would accept us, but it cost us more. And our solicitor was brilliant with it and picked up little issues at first purchase and at staircasing no one else on the estate was fully aware of.
Our circumstances of having an income that was increasing between 2008 and 2013 was unusual. The trend for the period was very much a stagnation in wages. Even considering staircasing for most would be utterly impossible.
Our experience was most definitely that shared ownership only really works when house prices are increasing. If they stagnant or decline you get fucked even if your finances are absolutely perfect.
In the end we were glad to be shot of the property completely last year when we moved. Even then there legacy convenants still lurking and we had the bizarre situation of having to get a letter to give us permission to sell a house we owned 100% of from the housing association. Which was a nightmare to get and cost us more money.
All the additional extra costs added up. It was stuff like limited mortgages being available to you, extra legal cost, housing association costs, not being in control of your rent nor service charges. The extra time all these things took to resolve. These were the things we were not aware of.
We went into purchasing a property in 2007 in the full knowledge there would be a housing crash the following year. We planned for that.
We were just about the most prepared and wide awake you get, way above the average level of knowledge /expectation and we still had masses of issues relating solely to the shared ownership part.
I do think shared ownership has its place even now, but i also think they are hugely missold and frankly i think they are wildly inappropriate as a scheme in many parts of the country. I only really think they are particularly worthwhile in places like the southeast where affordability is so difficult. They tend to inflate prices overall rather than keep them down.
I'd like to see much better regulation of the whole sector and schemes being standardised to one universal scheme where there is only one set of terms of conditions not a hundred million different schemes which you need a good solicitor to help pick your way through.
I would prefer them have certain legal protections built into that too such as housing association automatically has to buy you out after 12 months if your house has been on the market that long and they refuse to allow you to drop the sale price. (I have heard of people trying to sell for 4 years as the housing association won't budge).
Im not anti shared ownership by any means. But having been through the system and seeing all the problems and being aware of the problems neighbours had, i certainly do not think that there is any level of transparency in the sector and that anyone is really fully able to go into purchasing one fully informed. In our case we kept hitting the phrase "ooo we've never done one of these before/come across this problem before" from people who had jobs dealing with property and shared ownership.
We were definitely guinea pigs and i think that few really understood the problems that the additional barriers shared ownership creates. When we bought in 2007 shared ownership was still something of a novelty and it was a lot less common. I think a lot of issues in many estates (built after ours) are only just coming to the point where the issue becomes apparent as the schemes work for a time limited period. The schemes were designed on the assumption that people would live in them for a few years, and then sell up or staircase. That just doesn't reflect whats happened in the last ten years. Across the board in both shared ownership and none shared ownership there has been a problem with people unable to afford to move further up the housing ladder (there is now a lot of noise about issues with this and a lack of affordable homes on the second tier of the housing market).
Shared ownership is particularly problematic in how some rents and service charges are tied to inflation. It created a nightmare situation where it made the property uncompetitive to sell, which tanked your equity and lost the money you'd invested whilst you also didn't have the same freedom to move as a normal renter. Its just wrong when you end up with situations where people who couldn't afford a 100% mortgage on the same property are paying more in combined mortgage and rent after 5 years. The whole point is that it was supposed to be cheaper and for people who couldn't afford to buy outright.
As i say shared ownership was designed for property prices always increasing, more people staircasing or moving out more frequently to bigger properties and wages steadily increasing. 15 years down the line and with many more people affected its only now becoming apparent just how bad they are for some people because the schemes weren't thought through in terms of different economic conditions.
Ultimately it did work for us. But we've always felt that we were the exception to the rule after about 4 or 5 years and thats not right. They are deeply flawed though I still think in theory they are a good idea if schemes are set up properly and there are proper safeguards for buyers that are written into law. I do think people are being actively missold these things from what we were told and what others we know were told.