Renting v Shared Ownership - school catchment

Srp123 · 2022-07-17T10:15:10+00:00

We currently live in a big old rented terrace house, in a good school catchment area. The house is not very kid-friendly. We have the chance to buy a new build, smaller starter home with shared ownership nearby (40%). However, we have been told by the school there is less chance that this house is in the catchment area. Also the rent part on the SO property increases annually in line with inflation, so with the current market it may increase a lot - we may get stuck there with a high monthly payment. Our daughter is 6 months old. Would you stay in a rental home for the next 4/5 years, for the certainty of getting into a good school? We love the area and would look to buy here as and when we can afford it. Or would you buy the SO house as its more child friendly and more secure than outright renting? But risk a possible school stress in 4 years time.

JudithHarper · 17/07/2022 11:20

I'd go for the shared ownership. Security of tenure would be very important for me.

The landlord could sell up or increase his rent by any amount he wants, so you are in no better position now than if you went for shared ownership.

KarrotKake · 17/07/2022 11:25

There is no guarantee you will still be renting the same house when it comes to school applications. I'd move.

Teaandcakeordeath83 · 17/07/2022 11:30

If buying is an option for you then I'd buy but wouldn't go for the shared ownership option if you paid me.

I'm a renter with three kids. I'd rather rent with that uncertainty than be trapped in a house that will be difficult to sell (trust me it's a pain in the arse selling shared ownership/ scheme housing) with potentially spiralling rental costs you can't control anyway. Even if you don't stay in your current rental you could find a new rental in the same catchment area.

JudithHarper · 17/07/2022 11:40

Teaandcakeordeath83 · 17/07/2022 11:30

If buying is an option for you then I'd buy but wouldn't go for the shared ownership option if you paid me.

I'm a renter with three kids. I'd rather rent with that uncertainty than be trapped in a house that will be difficult to sell (trust me it's a pain in the arse selling shared ownership/ scheme housing) with potentially spiralling rental costs you can't control anyway. Even if you don't stay in your current rental you could find a new rental in the same catchment area.

@Teaandcakeordeath83

Not all shared ownership is difficult to sell. We live on a new-build estate and on our street, shared ownership is on one side and large private houses on the other. A couple of the shared ownerships came up for sale and they were both sold within a fortnight. All 5 of the private houses opposite have changed hands at least once and some of them have been up for sale for months.

Also, the rate of rent increases is defined in your lease agreement. It's private renting where the rent can spiral up and that is certainly out of your control.

I agree that each scheme is different but buying our shared ownership is the best move we have ever made.

Hatsoff5 · 17/07/2022 11:46

Normal social housing do have a yearly increase but its a small amount perhaps £5 per week or less area dependant its nothing like private. I'm not sure if that still applies to S/O as well.

JudithHarper · 17/07/2022 12:01

Hatsoff5 · 17/07/2022 11:46

Normal social housing do have a yearly increase but its a small amount perhaps £5 per week or less area dependant its nothing like private. I'm not sure if that still applies to S/O as well.

From memory, our lease stipulates CPI + a fraction of 1%

stayathomegardener · 17/07/2022 12:54

I think S/O has the potential to become unstuck pretty quickly in a downturn, I wouldn't contemplate it at the peak of the market.

Especially as the school place would be less achievable.

Ragruggers · 17/07/2022 12:58

Private renting now is very risky.So many landlords are selling you will be given 2 months notice and a lot of hassle and stress.In my area there is so little to rent so I would buy anything rather than rent.

Teaandcakeordeath83 · 17/07/2022 13:06

@judithharper mine has been absolutely bloody awful to sell. It's a flat. Value has barely gone up in the 11 years we've had it. The service charges, ground rent and shared ownership payments plus the mortgage payments could have been the mortgage payment for a decent sized 3 bed house at the time we bought but we didn't have the deposit required- hence being stupid and saddling myself with that thing. We will have very little equity once it sells so still no deposit for a house we can own.

The sale has taken more than a year between negotiating with all of the various entities involved and it still hasn't completed though I assured it'll be next week (to be honest it has to be soon before I go bloody bankrupt). I'm glad it's worked for you- it certainly doesn't for everyone.

JudithHarper · 17/07/2022 13:44

Teaandcakeordeath83 · 17/07/2022 13:06

@judithharper mine has been absolutely bloody awful to sell. It's a flat. Value has barely gone up in the 11 years we've had it. The service charges, ground rent and shared ownership payments plus the mortgage payments could have been the mortgage payment for a decent sized 3 bed house at the time we bought but we didn't have the deposit required- hence being stupid and saddling myself with that thing. We will have very little equity once it sells so still no deposit for a house we can own.

The sale has taken more than a year between negotiating with all of the various entities involved and it still hasn't completed though I assured it'll be next week (to be honest it has to be soon before I go bloody bankrupt). I'm glad it's worked for you- it certainly doesn't for everyone.

@Teaandcakeordeath83

Yes, thats not good. I have heard about flats being difficult to move on. I am surprised there is no increase in value though. I suppose it shows the difference between each scheme. Ours seems quite good plus it's a high demand area (North Yorkshire).

Hope it goes through for you OK.

birdsinthegarden · 17/07/2022 14:09

I have a SO house and I love it. We're on 40% but looking to increase to 60% next time we're due to remortgage.

I would not do SO with a private company though, but instead choose a housing association. They're charities and it's within their remit to keep it affordable. The rent goes up 2% every year and we pay £6 a month for ground charge. Ideally I'd have liked to have bough outright but I wanted a nice house in a nice area and with our budget we could only have one of those things. SO was the best choice for us. The two houses opposite (also SO) sold within 2 weeks of going on the market.

AprilRae91 · 17/07/2022 14:13

I had a shared ownership house that went up 60k in value in 4 years. I owned half so that was 30k in the bank for me.

the housing associations are useless and they can be cheeky with charges, plus it cost me an extra 1.5k to sell due to extra paperwork (the association covers no expenses but charges you admin fees). But the rent portion was reasonable whilst I lived there.