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Legal & money

Housing Association Shared Ownership

(24 Posts)
Chestnut Fri 01-Jul-22 12:08:58

My daughter is considering buying a new house through shared ownership with a housing association. Does anybody know the pros and cos of doing this?

Buttonjugs Fri 01-Jul-22 12:16:51

I did this quite a few years ago and it was great. We paid rent for one half and mortgage for the other. The rent was lower than the market rent for half a house would be. Then when we sold it as shared ownership we got the top price because they were in demand and we went on to buy a similar house outright and did very nicely out of it. Only con is you are 100% responsible for the property, which you would be if you bought outright anyway.

Sago Fri 01-Jul-22 13:48:33

Interest rates are going up.
When we lived in the south in the 90’s we knew people that did this and lost their homes.

Chestnut Fri 01-Jul-22 14:24:59

How did they lose their homes Sago?

Oopsadaisy1 Fri 01-Jul-22 14:27:53

MzOops had a shared ownership flat in London, they lived there for 5 years and got a good price for it when they sold.

Oopsadaisy1 Fri 01-Jul-22 14:28:13

PS about 25 yrs ago.

Witzend Fri 01-Jul-22 14:39:07

A dd’s partner bought a shared ownership house some years ago. Whether he’s bought extra percentages I don’t know, but it seems to have worked very well for him.

The big advantages over renting, it seems to me, is that you have much more security - you won’t have a landlord kicking you out because he wants to sell, and you don’t have to ask permission to decorate the way you like, put shelves up, etc.

Chestnut Fri 01-Jul-22 14:44:06

I know interest rates are going up, but if you can't afford to pay then why would having shared ownership be any different to owning outright? Presumably you'd be stuffed either way.

Casdon Fri 01-Jul-22 14:50:58

Chestnut

I know interest rates are going up, but if you can't afford to pay then why would having shared ownership be any different to owning outright? Presumably you'd be stuffed either way.

It’s the opposite Chestnut. The rent and mortgage added together is no more than rent alone on a similar property, you have security of tenure and a foot on the housing ladder rather than paying somebody else rent which is dead money. The deposit is less than you would pay for buying a full house, you only need to have a mortgage for half the value of the house, and it’s possible for a single person on an average salary to do it, which is impossible for singles to do otherwise.

Redhead56 Fri 01-Jul-22 15:28:00

I would not advise it we had trouble with two separate houses our auntie and uncle purchased. They both owned 75% of their properties and private housing associations owned 25%.
So many irritating problems for me to remember or list apart from the biggest problem… We had prospective buyers scrutinised by one of the housing associations so much we lost the buyers on two occasion. The housing associations made it very difficult for us because the more they hinder a sale the more money they make. We did not sell both of the properties until three years after our relatives died.
It took up a lot of our time and our money because of the troubles we had. We were stilling running our own business at the time so trying to sort the properties out was a nightmare. Our relatives did not read the small print when they purchased the properties. Small print especially about service charges etc which we had to pay even though the properties were vacant for over two years.

Calendargirl Fri 01-Jul-22 15:37:34

The OP is talking about her daughter doing this, I assume she is relatively young, whereas Redhead mentions a lot of problems that she herself faced when trying to sell a property that had belonged to ageing relatives.

Hopefully the OP’s daughter is not too worried about what might happen in x number of years time about a similar situation.

welbeck Fri 01-Jul-22 17:00:36

but you would have the same security of tenure being a tenant of a housing association, wouldn't you. they are social landlords. they don't just sell up and turf you out. i know they can redevelop and then you have to move, but they have to provide equivalent accommodation.
and that could happen with shared ownership too, as they are the freeholder.
i have heard of several people having problems when they try to sell/move from shared ownership.
also if a couple split up, can get v complicated.

www.maureenyounger.com/2020/11/18/ten-things-they-dont-tell-you-about-shared-ownership/

Sago Fri 01-Jul-22 17:16:32

They lost their homes because the interest rate sky rocketed and they could no longer afford to honour the mortgage.

Chestnut Fri 01-Jul-22 17:16:49

Yes Calendargirl my daughter is 40 so she won't be there until old age for it to be sold when she passes on. She will be selling the property herself in the coming years.

Chestnut Fri 01-Jul-22 17:18:15

Sago

They lost their homes because the interest rate sky rocketed and they could no longer afford to honour the mortgage.

Sago that would happen to a full home owner too. Maybe more so because they would have a larger mortgage.

tickingbird Fri 01-Jul-22 17:23:40

I know someone that bought one and eventually owned 100% of it and the freehold. I would always advise to use your own solicitor and not one recommended by the housing association so any covenants etc will be pointed out. It can be a good investment.

nadateturbe Fri 01-Jul-22 17:39:07

I did this when my husband and I parted. Meant I could choose where I lived. I owned 50%. Made a profit when I sold. I didn't have a problem selling.
I'm in NI and it's done through co-ownership. Good scheme imo. Not as good as buying outright. But better than renting.

Visgir1 Fri 01-Jul-22 17:54:20

My Niece had shared ownership via a scheme for Essential Workers (Teacher).. Lived there for about 10 years, eventually she sold it and made a good profit.

I did read in the Money section in today's Times, it is worth while (obviously depending on age) getting a 5% Mortgage, probably cheaper than Renting. Then selling up in 5-10 years time .
You can then change the style of Mortgage which would be better suited for you long term, you should make a good profit /deposit.

midgey Fri 01-Jul-22 18:08:21

My brother in law had a terrible job trying to sell his home and lost a lot of money.

Chestnut Fri 01-Jul-22 18:34:44

Midgey what was the problem selling his home?

Oopsadaisy1 Fri 01-Jul-22 18:55:43

Many people who go for Shared Ownership would never qualify for social housing.

MzOops experience of buying and selling was very positive.

nandad Mon 04-Jul-22 09:51:14

Chestnut, thank you for asking this question as son has also been accepted for a shared ownership flat. The flat is quite new in a nice area and he would not be able to buy it outright. All flats in our area are sold at a much higher price than they go on the market at, so for him this is ideal. I do have my reservations and would like him to purchase more than the 50% share, we are waiting to hear back. Buying additional shares, staircasing, can be expensive and you have to have a valuation which, some HA use to increase the rent. We also don’t know if he should have a survey and searches done as we thought the HA would perhaps already have these?

Please please responders tell us what the specific problems were as they may not apply in all cases. Midgey, why did your BiL lose a lot of money, surely this would only happen if the price of the property went down?

midgey Mon 04-Jul-22 09:56:20

The price of my brother in law’s flat stayed the same but the market went down at the moment he needed to sell. People didn’t want to buy a second hand flat when the new ones were still available! I would say be very careful.

Chestnut Mon 04-Jul-22 10:01:10

I'm not sure how you can be careful. Property prices and the market are out of our control surely.