- Notice
I work in property and deal with SO daily.
Basically the only time I would ever recommend it is if you have a large family and need 3-4 bedrooms but can never save the deposit required for such a sized house. So therefore you could save a 10% deposit for that part of the mortgage. Overall you will pay more as you pay your mortgage (and its interest alone) plus your rent. Plus they are leasehold- don’t get me started. Plus selling them is a nightmare!
All in all I would either save more and have a bigger deposit or look for a cheaper place! It’s a con.
Basically the only time I would ever recommend it is if you have a large family and need 3-4 bedrooms but can never save the deposit required for such a sized house. So therefore you could save a 10% deposit for that part of the mortgage. Overall you will pay more as you pay your mortgage (and its interest alone) plus your rent. Plus they are leasehold- don’t get me started. Plus selling them is a nightmare!
All in all I would either save more and have a bigger deposit or look for a cheaper place! It’s a con.
Gem_woody
Chatty Member
We bought a lovely new build 3 bed house in a nice area and never would have been able to get on the ladder without shared ownership. We own 50% and a housing association owns the other half. The house was worth 315k and we needed a fairly big deposit. It's meant to be cheap, but our rent is 500 a month and mortgage is about 500 a month too, but the house is massive for just the two of us, we'd never need to move! Our salaries weren't good enough to get a full mortgage on a house so I'm glad we did it.
I begrudge paying the rent and hope to staircase in a few years time to own more of the house.
We haven't had the best experience with the housing association as they were slow to help us with a leak we had and other issues but I prefer to have as little to do with them as possible.
I think it's the only way most 1st time buyers are able to get onto the property ladder nowadays, especially single people (like my sister, who also bought shared ownership house). I don't understand why people think it's a con. We love our home
I begrudge paying the rent and hope to staircase in a few years time to own more of the house.
We haven't had the best experience with the housing association as they were slow to help us with a leak we had and other issues but I prefer to have as little to do with them as possible.
I think it's the only way most 1st time buyers are able to get onto the property ladder nowadays, especially single people (like my sister, who also bought shared ownership house). I don't understand why people think it's a con. We love our home
I haven't had a shared ownership property, but I am joint executor for my BIL's estate which includes a SO property. We could have sold his place 4 times by now but each buyer didn't meet the housing associations criteria for the rental side, even though all had mortgage agreements in situ/were a cash buyer. It's just delaying the grief process for us all. The housing association gives zero fucks as they get their rent anyway, and when he died and we went to tell them, their response was "who else can take on the rent?" and when we said no one, they said "oh, according to this he has an 18 year old daughter, she can can't she?". We were pissed to say the least.
OP - I know this is a different stance to what you wanted, but the sell on criteria can be tough.
OP - I know this is a different stance to what you wanted, but the sell on criteria can be tough.
Alice Roosevelt Longworth
Member
We read some horror stories before we bought shared ownership, but it's worked out really well for us!
We could afford a budget of max £250k in London when we were looking to buy in 2013. It was do-able but all of the properties that we saw over a 6 month period would have required significant work done to them, and we just didn't have the budget to put money into a fixer upper.
A shared ownership development popped up in an area that we really liked, and we ended up buying a 40% share of a £360k property in 2014.
A few years after buying our 40% share, my husband completed his Master's degree and received a huge promotion. Shortly afterwards, I was headhunted and my salary almost doubled.
4 years after buying shared ownership, we found ourselves in the position to staircase to 100%, and our home is now valued at £400k.
It's worked out brilliantly for us, though some of our neighbours who didn't staircase to the full 100% had trouble selling their homes as the housing association had first dibs at trying to sell their property over a 2 month period before they were allowed to advertise with agents.
We could afford a budget of max £250k in London when we were looking to buy in 2013. It was do-able but all of the properties that we saw over a 6 month period would have required significant work done to them, and we just didn't have the budget to put money into a fixer upper.
A shared ownership development popped up in an area that we really liked, and we ended up buying a 40% share of a £360k property in 2014.
A few years after buying our 40% share, my husband completed his Master's degree and received a huge promotion. Shortly afterwards, I was headhunted and my salary almost doubled.
4 years after buying shared ownership, we found ourselves in the position to staircase to 100%, and our home is now valued at £400k.
It's worked out brilliantly for us, though some of our neighbours who didn't staircase to the full 100% had trouble selling their homes as the housing association had first dibs at trying to sell their property over a 2 month period before they were allowed to advertise with agents.
Thatswhattatsaid
VIP Member
I’m in the process of buying my first home and have had to do SO after my relationship broke down.
3 bed new build on at £173,000 (North West) I’ve gone straight in at 75% ownership so only pay £99 rent and £15 service charge per month, as well as my £513 mortgage after a £9000 deposit. There’s no way I’d have been able to buy a home without SO and anything I did manage would have needed a lot of work which I simply didn’t have the money for.
3 bed new build on at £173,000 (North West) I’ve gone straight in at 75% ownership so only pay £99 rent and £15 service charge per month, as well as my £513 mortgage after a £9000 deposit. There’s no way I’d have been able to buy a home without SO and anything I did manage would have needed a lot of work which I simply didn’t have the money for.
Viewer1901
VIP Member
Really interested in this - it’s likely the way I’m going to have to end up going to get on the property ladder. My sister has a shared ownership at the moment and she seems happy with it but she doesn’t really say much about the ins and outs of it
Eltonjohnsflorist
VIP Member
Just to say these (very real!) problems aren’t related to shared ownership but are the risks taken by any leaseholder (someone who buys a flat in a block)
Don’t buy a flat in a block unless you understand what being a leaseholder means in reality.
Shared ownership is good but it’s for people who can’t buy a property any other way- it’s not an alternative to full ownership.
Allthevest20
VIP Member
My deposit for SO was £24,000. 50% share.
I was evicted after my Mum died from our Housing Association house (gave me 4 weeks but I longed it out to 8) so I didn't have time to save more (her diagnosis to passing time was quick aswell and I'd just finished uni and started my current job). Average salary and single. Help to buy wanted £42,000 deposit for a flat whereas with SO I have a 2 bed house and garden (for my cat). Rent round here for similar is £1000+. Studios are around £500 a month plus. I hope to staircase one day to 100% and I'm saving what I can.
SO stopped me being homeless effectively or spending my entire paycheck on rent and bills alone.
Hello Kitty
VIP Member
WOW they are lucky. My sister was told the opposite as it's to help you purchase your home.
This is really the only thing I’ve heard so far that puts me off! Monthly, we could afford a “normal mortgage” - our struggle will be getting a big enough mortgage. Even with a fairly reasonable deposit I think we’d still struggle to get anyone to lend enough. Even 2 beds are around £220kDon't have experience of shared ownership unfortunately, but it was something we were looking at when buying.
We did find that the mortgage/rent came to a lot more than just a mortgage in our situation, so it's worth looking around. Obviously shared ownership houses were typically nicer/larger, but we are not looking to stay in our first home forever. We're in Kent
Hello Kitty
VIP Member
The help to buy ISA goes towards the deposit. How have you managed to get it back? Or do you mean you have saved money because you've used the ISA?
You've done a good thing going with the high percentage, well done!
ADBABE
Chatty Member
Well good for you for doing it on your own! Me and my husband are hoping to purchase a SO in about a year, will probably only be able to afford a smaller percentage to start off with but it's the only way we wont be stuck in the private renting game for the rest of our lives!
ADBABE
Chatty Member
That's true actually 75% is quite a big share, thank you
Bumblebee
Chatty Member
Our first house was SO and as someone else said even though it was owned 50/50 us and the housing association (you could only be offered what you would have been if you had been offered a council house. So for us it was a 2bed house) all repairs were down to us. We had a few issues with the build and it was all down to use to sort out and take up with the builders.
Not only did we pay rent as well as the mortgage we had to pay buildings insurance under the associations preference. We couldn’t shop around for a better deal. Also had to prove contents insurance each year.
There was also a service charge and ground rent to pay as it was a new build on a new build estate. Only a small one of 10 houses but was a few hundred a year plus £20 ish a month for grounds maintenance. Which was a Gardner coming twice in the summer to cut the grass!
When it came to selling we had to allow the association to find us a buyer first. After 3/4 months we hadn’t had a single viewer so after complaining we were allowed to put it on the open market for the 50/50 share. Which meant anyone could buy and they didn’t need to be on the council list. A first time buyer brought it and our neighbours complained as it was a single young man and everyone else was family’s. But the association let the buyer buy. He’s still there now.
We were fortunate enough to be moving to a much bigger property without SO. We did look at stair casing but there were lots of hidden charges and not hidden charges. So it made more sense for us to sell up and move. We were also fortunate enough that we had made a huge profit on it even having to give 50% of the profit to the HA.
I would seriously consider all other options and assess whether owning any part of a property is really better than renting for a few more years.
Not only did we pay rent as well as the mortgage we had to pay buildings insurance under the associations preference. We couldn’t shop around for a better deal. Also had to prove contents insurance each year.
There was also a service charge and ground rent to pay as it was a new build on a new build estate. Only a small one of 10 houses but was a few hundred a year plus £20 ish a month for grounds maintenance. Which was a Gardner coming twice in the summer to cut the grass!
When it came to selling we had to allow the association to find us a buyer first. After 3/4 months we hadn’t had a single viewer so after complaining we were allowed to put it on the open market for the 50/50 share. Which meant anyone could buy and they didn’t need to be on the council list. A first time buyer brought it and our neighbours complained as it was a single young man and everyone else was family’s. But the association let the buyer buy. He’s still there now.
We were fortunate enough to be moving to a much bigger property without SO. We did look at stair casing but there were lots of hidden charges and not hidden charges. So it made more sense for us to sell up and move. We were also fortunate enough that we had made a huge profit on it even having to give 50% of the profit to the HA.
I would seriously consider all other options and assess whether owning any part of a property is really better than renting for a few more years.
thatstupidcat
Well-known member
It’s sad that the average person have more rights when it comes to buying a toaster than a house.
I think there was a court case a couple of years ago. It was along the lines of lady had shared ownership, paid a deposit and her mortgage diligently. She later fell behind on the rent for the remainder as she paid rent to the developer for the proportion of the property she didn’t “own”.
Developer moved to evict and succeeded, and she didn’t get either her deposit or mortgage payments or equity she “owned” back.
It seems a bit like a shady car repo business but with crappy new builds with warranties that you can’t even wipe your backside with.
If you’re going ahead, make sure you don’t be cheap and use the developer’s solicitor, get your own specialist. Keep in mind that ground rents / maintenance / service charges typically compound so you may start out paying £100/year, but it only goes up.
And you have no say if the developer / holding company that owns the other proportion of your equity is sold on and terms of your contract that weren’t enforced start getting enforced to realise the new owner’s investment.
Also, you might find yourself stuck in a one or two bedroom forever because you cannot raise the equity or deposit to move up the ladder.
Caveat emptor!
I think there was a court case a couple of years ago. It was along the lines of lady had shared ownership, paid a deposit and her mortgage diligently. She later fell behind on the rent for the remainder as she paid rent to the developer for the proportion of the property she didn’t “own”.
Developer moved to evict and succeeded, and she didn’t get either her deposit or mortgage payments or equity she “owned” back.
It seems a bit like a shady car repo business but with crappy new builds with warranties that you can’t even wipe your backside with.
If you’re going ahead, make sure you don’t be cheap and use the developer’s solicitor, get your own specialist. Keep in mind that ground rents / maintenance / service charges typically compound so you may start out paying £100/year, but it only goes up.
And you have no say if the developer / holding company that owns the other proportion of your equity is sold on and terms of your contract that weren’t enforced start getting enforced to realise the new owner’s investment.
Also, you might find yourself stuck in a one or two bedroom forever because you cannot raise the equity or deposit to move up the ladder.
Caveat emptor!
HereForLOLS
Chatty Member
I did this with my first flat as there was no way I could have afforded a nice one in the area I lived in on 1 salary.
personally I didn’t rate it and found it a rip off (this was a private housing association rather than a government one) but I can see it being beneficial for houses as you’d probably stay in them more long term.
I moved out of my 1bed flat after 4 years and it was a bloody nightmare - they didn’t make it clear that they were meant to source the purchaser so my buyer then had to jump through hoops.
the rent I paid was pretty steep and the monthly service charges were crazy high - 60+ flats all paying £150+ service fees per month plus £200 a year ground rent......there were no residential gardens, shared areas etc.....it was just for communal utilities.....they were raking it in.
Wish there had been a housing development at the time offering the scheme. I think if you are somewhere you’ll live a lot longer term then it can pay off - buying more shares as your earnings increase etc.
personally I didn’t rate it and found it a rip off (this was a private housing association rather than a government one) but I can see it being beneficial for houses as you’d probably stay in them more long term.
I moved out of my 1bed flat after 4 years and it was a bloody nightmare - they didn’t make it clear that they were meant to source the purchaser so my buyer then had to jump through hoops.
the rent I paid was pretty steep and the monthly service charges were crazy high - 60+ flats all paying £150+ service fees per month plus £200 a year ground rent......there were no residential gardens, shared areas etc.....it was just for communal utilities.....they were raking it in.
Wish there had been a housing development at the time offering the scheme. I think if you are somewhere you’ll live a lot longer term then it can pay off - buying more shares as your earnings increase etc.