Bradbury Robinson Report post Posted April 28, 2011 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! Quote Share this post Link to post Share on other sites
Bloo Loo Report post Posted April 28, 2011 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? Quote Share this post Link to post Share on other sites
Vested Disinterest Report post Posted April 28, 2011 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. Quote Share this post Link to post Share on other sites
Pent Up Report post Posted April 28, 2011 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. Quote Share this post Link to post Share on other sites
@contradevian Report post Posted April 28, 2011 (edited) 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 April 28, 2011 by Sir John Steed Quote Share this post Link to post Share on other sites
TheCountOfNowhere Report post Posted April 28, 2011 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. Quote Share this post Link to post Share on other sites
Bloo Loo Report post Posted April 28, 2011 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. Quote Share this post Link to post Share on other sites
57percent Report post Posted April 28, 2011 ... and where does the debt associated with the other 75% sit? Govt Debt? LA Debt? Other? Quote Share this post Link to post Share on other sites
The Knimbies who say No Report post Posted April 28, 2011 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? Quote Share this post Link to post Share on other sites
Bruce Banner Report post Posted April 28, 2011 ......snap up a bargain........bag the best bargains........throwing money away renting..........got me on to the property ladder........I’ve now got an investment..... Quote Share this post Link to post Share on other sites
Reck B Report post Posted April 28, 2011 (edited) 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 April 28, 2011 by Reck B Quote Share this post Link to post Share on other sites
Odysseus Report post Posted April 28, 2011 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. Quote Share this post Link to post Share on other sites
otters Report post Posted April 28, 2011 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. Quote Share this post Link to post Share on other sites
Mr. Miyagi Report post Posted April 28, 2011 I was going to ask..but is she hot? Then I clicked on the link Quote Share this post Link to post Share on other sites
Lepista Report post Posted April 28, 2011 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? Quote Share this post Link to post Share on other sites
Bradbury Robinson Report post Posted April 28, 2011 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. Quote Share this post Link to post Share on other sites
@contradevian Report post Posted April 28, 2011 I was going to ask..but is she hot? Then I clicked on the link "She" won't even exist, the whole thing reads like an infomercial. Quote Share this post Link to post Share on other sites
exiges Report post Posted April 28, 2011 (edited) 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. Edited April 28, 2011 by exiges Quote Share this post Link to post Share on other sites
Si1 Report post Posted April 28, 2011 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. my sweet giddy aunt Quote Share this post Link to post Share on other sites
iLegallyBlonde Report post Posted April 28, 2011 my sweet giddy aunt She looks a bit like you two are related Si1 Quote Share this post Link to post Share on other sites
Goat Report post Posted April 28, 2011 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. Quote Share this post Link to post Share on other sites
SarahBell Report post Posted April 28, 2011 my sweet giddy aunt That's a laaadyboy surely? Quote Share this post Link to post Share on other sites
exiges Report post Posted April 28, 2011 That's a laaadyboy surely? Quote Share this post Link to post Share on other sites
exiges Report post Posted April 28, 2011 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 ? Quote Share this post Link to post Share on other sites
rantnrave Report post Posted April 28, 2011 That's a laaadyboy surely? Sibley's back in this country? Quote Share this post Link to post Share on other sites
