Help to buy // Shared Ownership

hillarypcof · 2021-02-08T20:51:59+00:00

Basically has anybody had any experience of either Help to Buy or the Shared Ownership scheme?? And would you recommend? I've only ever heard horror stories and just wondered what you'd all suggest for a late twenties-something couple seeking all options to get themselves a property! Thanks in advance x

Pipandmum · 08/02/2021 20:54

My friend lived in a bedsit for two years to save up the deposit for a shared flat. She's been there over 15 years now. I have no idea how much of the flat she now owns, but it was a huge deal for her and she has no regrets.

ldnirish · 08/02/2021 21:29

We're just about to leave shared ownership and I'm so glad we're leaving.

I was happy at the time but in hindsight I'd never have done it. I have neighbours who agree also.

I will say, hold out as I hear in 2022 there is a new revolutionised shared ownership scheme coming. Apparently, the housing association agrees to pay for all repairs etc for the first few years (current scheme means no matter what percentage you own, you pay 100% of the costs to repair)

earsup · 08/02/2021 22:48

If the properties are in new build blocks of flats then i only hear bad news...high service charges and poor quality build...once you add up the rent and mortgage and service charges, you can buy cheaper outright if you can borrow that amount....proceed with caution...!!

mumsy27 · 08/02/2021 23:32

great experience, I couldn't afford anything on open market.
staircased to 100% and sold with great profit.
ground rent £0
rent for 50% around £350 pm
service charge £95 pm(2020)
central London, housing association were responsible of maintaining everything out of the property including roof and window frames.

Myal · 08/02/2021 23:49

Following with interest.
About to make a decision on whether to take the plunge but ours is a council property with Westminster and we're going down the flexible ownership route.

mumsy27 · 08/02/2021 23:55

@Myal

Following with interest. About to make a decision on whether to take the plunge but ours is a council property with Westminster and we're going down the flexible ownership route.

what is the service charge, are you liable of any major repairs. let say, Westminster decided to change windows, are they going to forward a big chunk(your share) to pay.

Myal · 09/02/2021 01:03

@mumsy27,
Yes, we're 5 flats in a beautiful stucco house and would share the costs as leaseholders at 20% each.
The works have actually already been done with nothing major scheduled in except communal costs.

All the blurb received so far is for right to buy so waiting on a breakdown in costs and terms on the flexible ownership scheme. I've been told only Westminster and Camden do it

lboogy · 09/02/2021 04:05

This video is helpful

I've no personal experience but a know one friend who existed the scheme for financial reasons

DeeCeeCherry · 09/02/2021 04:41

I did it, no regrets. It was the only way I could afford to get on the housing ladder. My sister also did it, sold at a good profit and emigrated.

Cric · 09/02/2021 04:54

We did something similar to help to buy but it was through the developers.
We bought in 2013 and have now remortgaged and have paid back the developers. It was worth it for us. When we did it, we were buying a house that we could stay in and have our family here. We have no desire to move and have been very happy. We didn't want to do it for a house that we would want to move from soon after because of the rules in how much you pay back and if the house dropped in value we would have been screwed. However, with the government scheme I think there is less risk! Sorry not sure if that makes sense !!

ukgift2016 · 09/02/2021 06:39

We have used help to buy. The difference to shared ownership is you owe 100% of the house and you take a loan from the government. After five years you either remortgage the loan amount or sell your property.

We have a 3 bed house house and plan to remortgage and add the loan onto our mortgage. All repairs etc are covered by the housing developer for the first two years.

No regrets, helped us get on the ladder in the covid world with no 5-10% deposits.

Themostwonderfultimeoftheyear · 09/02/2021 06:51

We are in a shared ownership house with a 70% share and would definitely recommend if you have no other way of getting on the housing ladder. Without this we would still be renting and moving every 1-2 years and battling landlords with a DC in tow. Now we have been able to stay put for four years so far and decorate as we like to make it a proper home.

Things I would say are go for a house not a flat as all the horror stories I see seem to be around flats. Once we staircase to 100% (hopefully in next couple of years) we get the freehold and it becomes a normal house with no issues with selling etc. I have seen people sell theirs on this development as shared ownership though and have had no issues.

We went for a really well thought out new build development with loads of green space and the architect wanted to avoid the issues with new builds like small rooms and low ceilings. We also haven't had any repairs to worry about.

Look for a good housing association. Ours seem to genuinely care about helping people with housing and we have had no issues with rising rent and service charges, things have only risen in line with inflation.

If you can buy normally do that but if the choice is between renting or shared ownership I would definitely recommend shared ownership if you have done your research. In 2-3 years we will hopefully be selling and using the equity to buy normally :)

Original poster

hillarypcof · 09/02/2021 09:23

Thank you all so much for your responses, that is really insightful and useful!

Ultimately we are a bit torn. We would like a place to call our own ASAP, but we are both sensible and willl not rush anything for the sake of it, and we are trying to use the pandemic to our advantage in terms of taking our time in reviewing all available options.

Our dilemmas are as follows:

Help to Buy government loan scheme: I personally have anxiety about having to pay back the Govt Loan after 5 years. I would rather use my additional earning potential by that time to save/go on holidays/hopefully have a baby and use that extra money to do nice things as a family, rather than having to save it all away to pay back. I never thought about the re-mortgage option, so that is something to consider. With HTB, at least the home will be 100% ours by the end of it. However, with the price caps that the new scheme has introduced, and living in the South of England, we will struggle to get much for our money!

Shared Ownership: Ultimately we would be paying rent and mortgage on a house that will never be 100% ours, unless we staircase, but even that is reviewed on the value of the property at the time of staircasing, and not the price that we bought it for, so if house prices go up it may be impossible to ever own 100% of this property. However, it would be a great and easier way to get onto the property ladder for sure, and is an option we are going to look into.

Saving a bit more for a house which is neither of these schemes, which wouldn't be for a while yet as the deposite required for a minimal £285,000 house down here is between £40k and £50k.

Renting - i don't fancy the hassle of having to look for somewhere new every couple of years - seeking stability in order to settle down and raise a family.

I know I am fortunate to be in a position where I am able to take the time to consider all options, I'm just not sure which one to go for and I find it really useful to hear about your experiences! Thanks all x

OP posts:

Shafted2020 · 09/02/2021 10:56

When you say you pay back the loan after 5 years on HTB, you don’t pay back the full loan, you only start paying the interest on it - for us this worked out about £50 pcm so it wasn’t a massive amount.

We were going to remortgage and pay it off as our deal was coming to an end and we had paid off a significant amount of the mortgage so could eat the loan in total, however we sold instead and bought another HTB property.

Had no qualms about doing it as had no issues the first time around. Hopefully we will be in the same position in 5 years were we can remortgage and eat the loan, otherwise we will let it tick away for a few years and then do it.

Worriedhomemover · 09/02/2021 11:03

Best thing I’ve ever done!

We bought our house 5.5 years ago on help to buy with small 5% deposit. All we could afford and our house is so beautiful.

We bought out the equity loan early because we came into some inheritance and I’m glad we did as the house is worth much more now we are selling.

We have made 38k in 5 years from our house. My only regret is I wish we’d got a shorter mortgage term as we would have paid off a lot more and could have afforded it.

As with any new build, don’t buy it just because it’s all shiny and new. Check the plot, negative/ positives that may affect resale and choose wisely if you don’t plan for it to be your forever home.

Everyone I know who has done shared ownership or help to buy is in a great place after getting onto the ladder, I haven’t heard any horror stories. It’s better to go for if it’s all you can afford. I think it’s great for people on one income or a low income who would only be able to rent otherwise due to mortgage affordability (shared ownership in particular.)

Snofla4 · 09/02/2021 11:14

@Shafted2020

When you say you pay back the loan after 5 years on HTB, you don’t pay back the full loan, you only start paying the interest on it - for us this worked out about £50 pcm so it wasn’t a massive amount.

We were going to remortgage and pay it off as our deal was coming to an end and we had paid off a significant amount of the mortgage so could eat the loan in total, however we sold instead and bought another HTB property.

Had no qualms about doing it as had no issues the first time around. Hopefully we will be in the same position in 5 years were we can remortgage and eat the loan, otherwise we will let it tick away for a few years and then do it.

This is interesting to know about paying the interest back on the loan to start with thanks.

Penguinpinata · 09/02/2021 11:34

I’m another big fan of shared ownership - I could never have got onto the property ladder otherwise, and the security of staying in one place after years of renting was also a huge emotional relief as well as a financial one.

I’ve staircased up to a higher share since I originally bought it, and am currently selling my place and if my sale goes through I will have some equity as well, which has meant then I have a greater deposit for my standard purchase.

I think what helped me is I bought a flat with very low service charges, on an existing estate that was nicely maintained but not super fancy, so didn’t have any of the horror stories about high service charges I’ve heard.

Original poster

hillarypcof · 09/02/2021 13:05

@Shafted2020 that is really useful and interesting, thank you so much for sharing! Definitely makes me feel more at ease about it :)

OP posts:

sofia31 · 09/02/2021 17:13

We have also had a good experience with SO. Bought 3 years ago. The half rent is really cheap compared to market rate. This made it really affordable, so we saved lots to put down towards the other half.
Now we are staircasing to 100%, even though our wages are pretty similar to 3 years ago. We couldn't have bought a 3 bed house three years ago, but now we have full ownership in a place we want to be longterm. Good luck.

Mrsmadevans · 09/02/2021 18:07

My Dd2 25 has just done it . I think she is extremely lucky tbh. She has bought a 65% share in a new build semi detatched on a lovely private development for 126 k. The house price was 195k , she could never have afforded that in a month of Sundays. She doesn't have to pay anything in rent & there are no service charges and the property is freehold. She never has to buy the 35% & she can staircase after 3 years if she wants to but like the charity said 'why would you?'. The house is one of 40 on an estate of 160 Bellway homes that were available to buy as affordable housing , it was only available to ppl who worked near there and who were judged to be suitable and who fitted all the rules. Which she did thankfully, there was no way she would have been able to buy otherwise. She is so happy there and her house is the same as the other 2 bed semis that Bellway built on the outside , they have obviously equipped the full priced non housing association houses inside with more expensive appliances etc but her house is absolutely gorgeous and she is so happy . I helped her out and did a lot of research into the scheme but l honesty couldn't see a problem. I think it depends on the scheme and the association, hers is a registered charity and non profit making so l think it probably made all the difference. Good luck!

Mrsmadevans · 09/02/2021 18:17

My Dd2 house is a shared equity so it is a different scheme to yours by the looks sorry OP , they had the shared ownership scheme that you are talking about and it was very expensive .

ShellieEllie · 09/02/2021 18:47

My son has purchased shared ownership and it's been a great experience so far. It's meant he could buy a much bigger property rather than buying a flat. The Housing Association that own the freehold seem to be really good - they even reduced the monthly service charge a couple of months after he moved in. The monthly rent was also really low compared to the new build SO properties around. Might be worth looking out for a resale SO.