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Bradbury Robinson

How I Got On To The Proprerty Ladder...

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Daily Mirror Link

Stephanie Pawley didn’t want to keep throwing money away renting so she took on a second job to earn extra cash to help her save for a deposit.

Seems sensible...

“I got a job in a bar and worked six nights a week. It was perfect. I stopped spending on going out, but still got to do a bit of socialising and I earned some extra cash,” says Stephanie, 22, of High Wycombe, Bucks.

Yep, still going well...

“I also struck up a deal with my dad. If I saved up £5,000 he said he would match it to help towards a deposit. In the end I managed to save more and dad still doubled it, so I had £15,000.”

Not the best I suppose but there are worse things that you could do...

Stephanie, who works in the financial industry, has bought a new-build, two-bed flat on a shared ownership basis.

Ahhh...financial industry...new build...flat...shared ownership!!

She owns 25% and Thames Valley Housing owns 75%, on which she pays rent. “It’s really hard for younger people to get the cash together to buy a place,” she said.

“The shared ownership deal is perfect for me and it has got me on to the property ladder. I went to various lenders for mortgage quotes and Nationwide came up with the best offer for me.”

Stephanie’s share of the flat cost £44,000 and her £15,000 meant that she had a 25% deposit so she was able to get a decent rate of 4.29% on a three-year fixed rate mortgage.

“I was paying out £750 a month in rent for a two-bed flat. But now I pay £151 mortgage and £460 rent. I can’t believe it’s actually costing me less for a much nicer flat and I’ve now got an investment.

“It was hard work to get the deposit together but I’m so happy here that it was worth all the effort.”

And so it continues!

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who pays for repairs...who pays for the buildings insurance?

who suffers the loss if prices fall?

so, she pays all the loan off...she still has rent to pay.

what was the point?

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However much I despise shared ownership scams, this person seems to have successfully

  • hidden £15k from means-testing should she become long term unemployed
  • found a long term place to live
  • for which the remaining 75% will be much cheaper to pay off in a couple of years time

Unless the small print says that the remaining 75% will stay at (nominal/real?) 2011 prices until the day she dies.

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However much I despise shared ownership scams, this person seems to have successfully

  • hidden £15k from means-testing should she become long term unemployed

  • found a long term place to live

  • for which the remaining 75% will be much cheaper to pay off in a couple of years time

Unless the small print says that the remaining 75% will stay at (nominal/real?) 2011 prices until the day she dies.

It's a two bed flat. It's hardly long term.

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So the entry price for basically "council" and buying yourself out of an assured shorthold tenancy is £15k and you only end up nominally owning 25% of a shithole (though you will need permission to sell).

Demanding "key money" or a "premium" on residential (i doubt you would ever see your "investment" back) used to be illegal. I suppose calling it shared ownership gets round the law.

Edited by Sir John Steed

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Daily Mirror Link

Seems sensible...

Yep, still going well...

Not the best I suppose but there are worse things that you could do...

Ahhh...financial industry...new build...flat...shared ownership!!

And so it continues!

I'll be more interested to see how she gets off the property ladded in 2 years time. :lol:

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However much I despise shared ownership scams, this person seems to have successfully

  • hidden £15k from means-testing should she become long term unemployed
  • found a long term place to live
  • for which the remaining 75% will be much cheaper to pay off in a couple of years time

Unless the small print says that the remaining 75% will stay at (nominal/real?) 2011 prices until the day she dies.

her benefits start to decline after 16K IIRC.

its a two bed...so she wont get the full rent paid.

Its a three deal on the mortgage then what is the rest of the term.

According to the BBC, the repayments on a 29K mortgage are £159.47 per month...repayment over 25 years.....looks like she may have take a 30 year term

As for the shared part...she owns only 25%....the rest belongs to the HA....so as (if the value increases) so does her cost to buy out.

Quite often in these deals though, the loser of equity is the "owner"...the landlord keeps their value intact.

Then there is moving on....the landlord will have to approve the new tenants....

These things caused a lot of problems in GC1 a few years on when participants wanted to move on up.

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However much I despise shared ownership scams, this person seems to have successfully

  • hidden £15k from means-testing should she become long term unemployed

  • found a long term place to live

  • for which the remaining 75% will be much cheaper to pay off in a couple of years time

Unless the small print says that the remaining 75% will stay at (nominal/real?) 2011 prices until the day she dies.

Likely. There are those who cannot move because the place has dropped in value, but the owner of the other share still gets their nominal amount. They cannot sell unless repossession and auction sale forces a haircut. It is not a simple case of "oh well, if your £100k flat drops to £75k, then you only need to give us a pro-rata split" She's have to hand it ALL over in that case, bye-bye life savings.

This seems to be similar, if not the actual one:

http://www.rightmove.co.uk/property-for-sale/property-28609168.html

Sale Price and Equity

Sale Price: £175,000 Equity for sale: 25%

Cost of Equity: £43,750 Monthly net rent: £472.16

Monthly service charge: £110.62

So she's probably paying more like £720/month vs £750/month before when the service charge is included. Good value?

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I feel sorry for people like this - her weakness has totally been preyed upon by the current system - lenders/builders/government/landlords in total cohorts to relieve her of her freedom. It's abuse, She's been financially abused by 'cleverer' people.

Edited by Reck B

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her benefits start to decline after 16K IIRC.

its a two bed...so she wont get the full rent paid.

Its a three deal on the mortgage then what is the rest of the term.

According to the BBC, the repayments on a 29K mortgage are £159.47 per month...repayment over 25 years.....looks like she may have take a 30 year term

As for the shared part...she owns only 25%....the rest belongs to the HA....so as (if the value increases) so does her cost to buy out.

Quite often in these deals though, the loser of equity is the "owner"...the landlord keeps their value intact.

Then there is moving on....the landlord will have to approve the new tenants....

These things caused a lot of problems in GC1 a few years on when participants wanted to move on up.

So many FTBs are on 30 or 35 year terms. From my own personal experience (a weekend hearing smug peers tell me they've bought the 2 bed semi in Epping they've always dreamed of!), the majority of FTB are on 30-35 year terms, it has almost become the accepted.

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However much I despise shared ownership scams, this person seems to have successfully

  • hidden £15k from means-testing should she become long term unemployed

  • found a long term place to live

  • for which the remaining 75% will be much cheaper to pay off in a couple of years time

Unless the small print says that the remaining 75% will stay at (nominal/real?) 2011 prices until the day she dies.

I think you will find that half of that 15k was given/loaned to her by bank of mum and dad. Maybe they are in finance as well.

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So she's probably paying more like £720/month vs £750/month before when the service charge is included. Good value?

Plus the costs for servicing the flat - repairs, decoration, upkeep...

The costs for getting the place need to be factored into her "saving" - how much was organising the mortgage, solicitor fees, stamp duty (presumeably £0), etc.? How many years are these costs spread over?

What about the additional "occaisional" service charges, like when the outside needs painted, or the roof needs repaired?

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Plus the costs for servicing the flat - repairs, decoration, upkeep...

The costs for getting the place need to be factored into her "saving" - how much was organising the mortgage, solicitor fees, stamp duty (presumeably £0), etc.? How many years are these costs spread over?

What about the additional "occaisional" service charges, like when the outside needs painted, or the roof needs repaired?

They don't count.

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I was going to ask..but is she hot? Then I clicked on the link :blink:

"She" won't even exist, the whole thing reads like an infomercial.

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So.. she's scraped together 50% of the 25% deposit required to buy 25% of the house..

I've heard of fractional ownership, but that's something else.

Looking at the stupid grin on her face, ignorance truly is bliss. Probably considers herself a home "owner" now. :rolleyes:

Edited by exiges

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So.. she's scraped together 50% of the 25% deposit required to buy 25% of the house..

I've heard of fractional ownership, but that's something else.

Looking at the stupid grin on her face, ignorance truly is bliss. Probably considers herself a home "owner" now. :rolleyes:

image-9-for-yourlife-telly-money-27-04-2011-gallery-909590807.jpg

my sweet giddy aunt

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Likely. There are those who cannot move because the place has dropped in value, but the owner of the other share still gets their nominal amount. They cannot sell unless repossession and auction sale forces a haircut. It is not a simple case of "oh well, if your £100k flat drops to £75k, then you only need to give us a pro-rata split" She's have to hand it ALL over in that case, bye-bye life savings.

Also worth bearing in mind that if you fall behind on the rent your landlord has the usual powers of eviction, in which case your share of the flat ceases to exist but you still get to keep the debt - frankly I'm surprised that the banks are willing to lend in these circumstances.

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Also worth bearing in mind that if you fall behind on the rent your landlord has the usual powers of eviction,

I did not know that

Wonder if you can SMI it ?

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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