Pulled out of shared ownership purchase at last minute

[GoingDownLikeBHS]

Due to exchange today, I didn't give the solicitor permission to proceed, they just said let us know what you're doing so we can close your file. That was it. I emailed them this evening and said not going ahead (I told the housing association last week I was worried and wanted to pull out, obviously no one can make up my mind for me, I've had enough trouble with that myself!) but it's been a horrible journey and I feel very sick.

I was allocated the house in March after making a full time job of securing one. I thought shared ownership was a lifeline for me, a way to get back on the property ladder after divorce, but I calculated by year 5 the rent etc would have risen so much I couldn't afford the payments and then would be worried whether or not I'd be able to sell, and even then probably at loss or barely making back what I paid. I'm in my 60s so it was a real last chance.

Back to looking for a new rental for now. I have some equity from the divorce but it's not going to go far towards buying anything. Feels like a sliding doors moment. Not sure what else I can say (before someone asks, it was a house, not a flat). Feeling sorry for myself? Relieved? Not sure.

It sounds like you’ve done the right thing lovely and saved yourself more stress ahead in five years time x

YOU'VE 100% DONE THE RIGHT THING xx

I honestly don't know how shared ownership benefits anyone except the council

Sorry the housing association, the rents are too high. I don't know why anyone does it

Thank you all, I woke up sick with worry - but I'm thinking if it was a bad idea, it's a bad idea. The fact that I am now struggling to find anywhere else to live doesn't make it a good idea, right? It was a £470k house I had a 35% share; maybe if a smaller house I would have said just go for it rather than be casting around for rentals.

What’s your situation, do you have kids. I think you’d be better off buying somewhere
much smaller but outright and starting at the bottom of the ladder again if you dont have dependants.

I have a vulnerable adult child who needs a bedroom. Everything I see that I can afford is derelict, I wanted a shared ownership as I knew I'd baulk at a bit of decorating let alone a new kitchen or roof!

I am in the same position further to a divorce, can’t afford to buy on the open market so this feels like my only way, rent and service charge will be between £650-£800 depending on property, but private renting is approx £1500, which would just use up all the equity I will be receiving from the sale of the house. Also concerned about future rent/service charge but don’t know what else to do.
I haven’t worked out the increase over 5 years. Just looking at now and hoping for a pay increase to cover extra every year.

@Ilovetheseboots I think my age is a big factor - 62,, I retire in 5 years - but sounds like it might work out better for you? My plan was to use most of the equity to buy, and then sit on it until I retired. But that didn't seem feasible because the costs would be spiralling and I'd be getting older. I'd need to be able to buy something outright in my late 60s.

When you get to reserve the property (too late in my estimation) you get something called a KID - key information document. In that they show an extrapolation of rent and service charges over 5 years. I was offered quite a few houses, and found the year on year increases to generally be 4-5% - that would be a safe figure to use for calculation. Rent etc always goes up by either CPI or RPI plus 0.5% or 1% depending on the development. Thing is though, wages don't. Well, not in my field.

Hmm this is really good to know thank you. I would be lucky to get 2% payrise and once at top of band nothing really, which is a concern.
I am 52 but still concerned about increasing costs and what I will do in retirement. Can’t see me being able to staircase either.
Were you looking at new builds or resales?
from what you have said probably why I am seeing so many resales sitting un sold for months and then some go under offer then come back on again a few weeks later.
The sensible thing would be for me to move to a cheap area hundreds of miles away to buy, but can’t think of anything worse, up rooting teenage kids and leaving family and work so not doing that!

the other issue you might face later down the line is that these properties are often unsellable. Which is a huge strain on not only finances but mental health.

Have you thought about council housing op? You might be a priority as over 55 and also with your vulnerable adult child?

You do what's right for you, but I will say I live in a shared ownership home and will say it's great much cheaper than renting 100% a home this size in my town. 100% mortgage would also cost a lot more month to month.
I would only be able to afford to 100% rent or mortgage a small flat so this is the only option for my current goal in life (having a family).

Ive heard shared ownership flats can be a nightmare with service charges but if you ask me the houses are good.

Unfortunately my budget doesn’t stretch to a house so trying to make sure it has a lower service charge than some of the extortionate ones.
Makes me think that SO is better when 2 people are doing this together so can cover the yearly increases, unlikely single applicants that will bear all of it.
I hope everything works out for you OP.

Could you relocate? Not sure how much money you have available but if your able to relocate anywhere you could buy a 2 house outright or with a very small mortgage. Some mortgage companies give a mortgage through to aged 72 if you have a private pension. Speak to a mortgage advisor if you havnt already. Good luck.

I think you did the right thing.

My first property was a shared ownership 1 bed flat in London. The flat itself was fine but there were issues with service charges going up all the time and the housing association needing to be chased to do repair to communal parts. It did give me a secure roof over my head for a few years but it definitely comes with issues.

In the end I managed to sell it and I left London to buy a small house.

Is there any way you could move somewhere where property prices are lower?

"The sensible thing would be for me to move to a cheap area hundreds of miles away to buy, but can’t think of anything worse, up rooting teenage kids and leaving family and work so not doing that!"

See this is the thing, @Ilovetheseboots and @SUPerSaver721 , the number of people telling me that my dilemma doesnt exist, because I could simply move away from everyone and everything, and start again at 62!! One friend actually said to me "well if you move to X area (cheap, rural, 2 hours drive from my family and over 1 hr 30 from office on train) then you wouldn't be in this situation would you BHS?!" She's not the only one - I live in South East, another friend said move to Birmingham as that's much cheaper (honestly I think my friends don't like me!!).

I'm not eligible for social housing of any sort @Orangesandlemons77 as I have the equity from my house so that disqualifies me for the council list and also any housing associations.

@30percent I have to say, based on the problems I am having getting a rental and the costs etc I am with you - which is making me think I have really ballsed it all up.

So my plan A was shared ownership, plan B was to buy a small house with a mortgage - in my area, within a 60 mile radius (thought that was me being reasonable) a 2 bed freehold house which needed a lot of work would cost around £280k. I'd need £100k mortgage (just editing to say in order to afford that I'd need to work till 75 - I can do it, I'd rather not obvs). I can just about do it, but its going to leave me with nothing day to day, just the house the bills and food. Luckily I am someone who thinks I am lucky to have even that, but most wouldn't choose not to be able to afford a coffee or a haircut, let alone to retire before 75!

So yeah, poor me, it's just a bit crap - but even today people contacting me saying they knew all along I should have taken the shared ownership .... can you guess what they said this time last week?

I am very aware this is a first world problem, but I still need to sort it out.

Wow you are so similar to me. I totally get it. Whilst I am grateful to have the equity it still feels bleak.
Also South East, would need a 100k mortgage just to get a 1 bed flat that 3 of us can’t live in practically.
A few friends have said move away, same re SO, saying to not do that buy something small, but can’t afford the mortgage. I’ll rent initially and use some of the equity, as the rent is nearly as much as my take home pay.

I would be tempted to move somewhere like Scotland and buy a little place outright and then you'd qualify for e.g. pension credit in a few years time. For a job could work something different perhaps and would be free university for the teens

Will you be able to afford rent when you retire? I know here rent is a good £300 a month over what your paying for in a mortgage.

Oh, eff your friends and their changeable opinions. Upping sticks to another part of the country is intimidating for anyone, let alone post 60!

Have you spoken to a mortgage broker about what sort of mortgage you can get?

I'm clutching at straws a bit here. I know that some retirees basically get mortgages where they don't pay a lot at all and the house gets handed back to the bank to sell instead of their kids when they pass away. Or am I thinking equity release? Idk. Anyway - first thought - a call to a good broker to see how you could 'afford' more, and still be able to live.

@KievLoverTwo I need new friends!

They're probably just desperate to help you in any way they can think of.

Birmingham is NEVER the answer though. Teehee.

But, other thought: you can now get joint mortgages with family and/or friends (because banks have to find a way to make money so they're coming up with new ones - they're also about to scrap some of their self imposed lending criteria to lend more).

Could someone buy with you? Someone who won't necessarily live in the house but will benefit from the equity it makes way down the line when it is sold?

You did the right thing OP.

I bought a Shared Ownership flat almost 20 years ago when I was in my early 20s. It was the only way I could realistically get on the ladder in the very expensive area I wanted to buy in (London). In my case it worked out well. I eventually managed to buy 100% and when I sold I had enough equity to buy the house I now live in.

I definitely wouldn’t do it now though as the stories I hear about service charge and rent increases are horrendous. I paid about £300 rent and it didn’t increase much but the awful Housing Association I was with consistently sent us outrageous one-of service charge bills at the end of each financial year to make up for alleged ‘shortfalls’ in the previous year. When we (residents) investigated fully we discovered there were charges such as £600 for the “maintenance of a white board” in the communal entry, several thousands of pounds for non existent gardening, £800 for changing a lightbulbs etc. There needs to be better oversight as some Housing Assocs are staffed by absolute cowboys.