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London Shared Ownership, Now Or Never?


LFC980
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Hi everyone

My partner and I have been renting in the Lambeth for almost 3 years now have been getting pretty distressed at how it seems we will never be able to buy a flat/house. Ever.

The fact we've given about £55k to landlords over 5 years is also pretty distressing.

Whilst we've been renting it's meant we couldn't save enough, quickly enough, to get a big enough deposit together.

However I've recently been looking at various shared ownership schemes (New Build Homebuy) and thought I'd do a bit of research on here. It seems too good to be true. Very negative views on here it turns out, and I've read the various horror stories.

My impression was actually pretty positive, but I might be being persuaded by the talk of vibrant bars and restaurants, and stock photography of generic smiling couples in their generic flats (sorry, apartments) :lol:

We're not keyworkers, or on any social lists. Just a pair of late 20s graduates with secure (as you can get these days) jobs who scrape in just under the minimum income threshold.

A particular development we've looked at is in central London, in the Waterloo/Borough area. Very central, walk to the river, walk to waterloo for my commute, look at tower bridge out the window, 240k for a 2 bed flat (shared kitchen/living room, but would look to shove dividing wall in at some point).

There's a few things we're going to check: what percentage of the building is given out to the drug scumbags, the fixed service charge etc.

It's offered at a minimum 30% share with rent being paid on the rest, but we're looking to borrow to buy 40-50% straight off.

Clearly mortgages seem to be difficult to get these days, but that's another issue

As a quick calculation, the rent on that remaining 60%, is 1/3rd of our total rent at the moment.

I'm no property expert, but the location appears central enough to sustain pretty high demand. Borough's a pretty decent area, but like most parts of London you're only a few hundred metres away from scumbags.

By only buying a 1/3rd, you only lose 1/3rd of the total loss in value (if that makes sense).

And at least we would be paying into a mortgage, which we get back when we sell... get a percentage of it back anyway, more so than at the moment with renting.

Been reading the various discussions on here and it seems many think the market will stop falling by the end of this year, then interest rates will start rising through 2010/11.

So is it a sensible decision to buy in this area at the moment?

Or am I being a complete fool in even considering getting into the property market and just wait it out a few more years?

Thanks, B

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Hi everyone

My partner and I have been renting in the Lambeth for almost 3 years now have been getting pretty distressed at how it seems we will never be able to buy a flat/house. Ever.

....

...

So is it a sensible decision to buy in this area at the moment?

Or am I being a complete fool in even considering getting into the property market and just wait it out a few more years?

Thanks, B

You already know the answer ;)

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  • 4 months later...

As it goes we went ahead and purchased a property through the New Build HomeBuy scheme in central London and for us it seems to have been a great decision so far... despite the negativity surrounding shared ownership on this forum.

We're paying £300 per month less on rent/mortgage as we were solely on rent previously, and paying off a mortgage rather than giving it all away on rent.

But the main thing for us was the location of the development we found. We were living out in zone 3 nightmare but now minutes from the river and very close to a few mainline and tube stations in zone 1. I no longer have a travelcard as I just walk to work and most other places.

Some of the developments we looked at seemed to be slightly overpriced though, despite valuations being done by apparently "independent surveyors". But it's a question of paying £5k over the odds or continuing to rent for another 5-10 years. There were a few developments more expensive than the one we chose and smaller and further out of london as well.

So my advice would be... location... find one that works.

Also arrange your own mortgage. They tried to push us to use their financial advisors to broker our mortgage, saying things like they can improve your chances of mortgage being approved in the current financial climate etc. We had no problem sorting it ourselves and felt it was important to be more "in control" over the process.

For your info we got a fixed rate of 4.1% for 3yrs with Nationwide and it seems to be a good deal having spoken to many friends who've taken mortgages in the last 5 years.

I think only Nationwide and Halifax offer shared ownership mortgages... but don't quote me on that. We just shopped around.

Hope this helps. Cheers

Edited by LFC980
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