Shared Ownership schemes..Would you ?..Have you ?

Bit puzzled as to why you thought he should have all the profit when he only owned half of the property?

Yup, like with any property purchase you have to get a good solicitor to read the conditions through and advise.

My DS’s first flat was a part own part rent scheme. I’m divided on it personally as he had a few problems with other tenants in the block who were just renting theirs (which some are) they didn’t seem to care as much about looking after their places as the ones that were buying. Also when he sold it was a nightmare because you have to give them (rent part lease holders) the first 8/12 weeks to try to get a buyer, they have to approve your buyer if they can’t get you one, they dictate the price you get for your property and the big one ……they take half your profit from the sale!!!! So when he bought the flat it seemed ok’ish but unfortunately he wasn’t in a position to buy any other way, but when he sold it, it felt like con after con. I strongly suggest if you’re thinking of buying one read and re read the small print thoroughly. One last thing he found was you had to have who they dictated to get a mortgage on the bought part and they certainly weren’t normal building societies, mortgage companies we had never heard of who charged a good one or two percent more than high street banks so be warned.

We looked into this for my (vulnerable) daughter with a housing association who were providing support for her and decided against it. All the expenses would have come to us (including all regular management/service fees, ground rent, their legal costs and fees) yet when the property is sold the value is split. We would have had to pay for all improvements or renovation required. Also they charged us a few hundred pounds to come and view properties with us and said no to anything my daughter liked.
The only ones they approved were really expensive purpose built flats in blocks, mostly newbuild, with high service charges.
I think it might be a different matter if you were considering a block where all the flats were shared ownership, but you would still be lumbered with all the costs and only half the profit.

Why do they have regrets?

l know several younger people who have entered into these agreements and all have regretted it.

"but then landlords are not exactly renowned for efficient and speedy fixing of any issues, are they?" Witzend, that's a bit unfair. I have a number of houses and attend to problems within 24 hours if at all possible, certainly within a week. Not all landlords are remiss.

I own a shared ownership property and have just sold it very quickly at double the purchase price. It is far far better than renting for the simple reason that the property appreciates in value and the proportion of rent you pay is subsidised by the housing association.

Our daughter bought her first flat with Shared Ownership over 24 years ago, she bought and sold it very easily. It was better than paying out a fortune in rent and she had the security of knowing that she could stay as long as she wanted to. The property rose in value and she then bought a house with a ‘proper mortgage’ with a good deposit.
Her BIL has been in a Shared Ownership house for over 15 years again no problems.

Their experiences have been very positive and not ‘the worst of both worlds’.

My friend had done this twice. The first time because she couldn’t afford to buy outright after a divorce. She has since moved areas to be nearer her son and done it again. Both times it was for new build houses and it’s worked out well for her.

One of my nieces has had a lovely shared ownership house for about 5 years. Very high spec, light and roomy, detached 3 bed house. They are very happy there. I think she said they can pay off more at any time.

Before they decided to go that way she added up all the money she and her partner had paid in rent since they had been together and was staggered. She says shared ownership is definitely saving them lots of money.

Georgesgran

I wonder what you’ve heard fancythat? Perhaps someone who has entered into a rent to buy arrangement with a private landlord/owner?
As GSM rightly says, it gives a sense of ownership and the freedom to maintain/improve things and not be under the strict constraints of the private rented sector - at the mercy of some unscrupulous landlords.

Possibly from MN. This thread?
Plus googling.
We looked into it about 1 year ago on behalf of someone.

www.mumsnet.com/talk/property/4822487-can-anyone-explain-shared-ownership-to-me

There's a limit on how much is allowed on a mortgage - so, if it helps in buying a place, rather than renting, that seems a positive option. Yes, it helps builders with 'affordable housing' - not that many can actually afford it. There don't seem to be enough small starter (or freehold retirement) homes built.

I'm very wary of the 'lifetime mortgage racket - but that's another story.

My sons wasn’t hard to sell. In fact the Housing Association had a waiting list of those wanting to buy so he didn’t even have to market it!

They are often new builds, and round here at least new builds have much smaller plots than established homes. We were also thinking that we would buy more of the property as savings permitted. We were advised however that this would incur fees each time, and that we should either buy up to 50%, or 100% outright, as it would be harder to find someone to sell on eg 60/70/80% of a shared ownership home to. I can see how it might appeal to some, or be the only choice, but in our case it wasn’t worth it in the end.

I wonder what you’ve heard fancythat? Perhaps someone who has entered into a rent to buy arrangement with a private landlord/owner?
As GSM rightly says, it gives a sense of ownership and the freedom to maintain/improve things and not be under the strict constraints of the private rented sector - at the mercy of some unscrupulous landlords.

My husband bought all property/ grounds around our home by shared ownership, if I understand the term correctly. He pays a percentage and makes payments to the owner, until he owns the bit of property clear, much like from the bank. If I'm guessing what your term means correctly, then Yes - good plan.

It’s quite common CrazyH

It’s a whole property and the ‘share’ is with the builder or housing association etc. It’s seen as an affordable way to get on the housing ladder (usually on a nice new estate) and there’s the opportunity to purchase more of the property, in stages, as and when the contract allows.

… as part of a larger development …

HousePlantQueen

These schemes work for some, worth looking into. They are of course, just a way of manipulating the 'affordable housing' quota.

Affordable housing is frequently built by developers as part of a larger and sold to housing associations. Developers don’t like affordable rented housing because experience has shown that the tenants often behave in an anti-social way - I have seen this for myself and had to threaten action against housing associations to ensure their tenants behave themselves in an acceptable way, look after their gardens, don’t use their balconies as dumping grounds etc. Developers far prefer shared ownership because buyers have a stake in their property and look after it. They can buy greater shares as and when they can afford it, but often not up to 100%. It’s a good scheme for people who want to get on the housing ladder but can’t afford to buy outright.

I dont know much about it, but I have heard it described as the worst of both worlds.

Thanks for all replies so far, it is one of the options to explore.

These schemes work for some, worth looking into. They are of course, just a way of manipulating the 'affordable housing' quota.

My son bought his first flat this way. He bought 50% with the option to buy more in future.

It worked very well enabling him to buy when the full purchase price would have been out of his reach. There wasn’t anything remotely for sale at the amount of money he could raise so buy something smaller that you own entirely isn’t an option for a lot of people.

It worked very well and sold easily to another buyer who was in the same position.

The lease needs to be looked at carefully by a qualified solicitor just to make sure there are no clauses that disadvantage either party.

I know a couple of people who have done it with reputable housing associations. Neither would have been able to get in the property ladder otherwise. It's not ideal but preferable to long term private renting and the insecurity that brings.