TeaAndToast Posted December 27, 2012 Share Posted December 27, 2012 Hello, Many thanks for all those who have contributed to this forum, some great posts. My girlfriend and I have been thinking about going co-ownership because my past credit history is bad, and hers is quite good at 950 on Experian after new car finance. Our small deposit was wiped out by an act of nature. I can see the likes of Ulster Bank not requesting any deposit at 50% with co-ownership. But do they frown upon this when assessing? The co-own tool says we are able to go to 100K at 50%. Should we apply now or hold off as we could pull like £15,000 by Aug-Sept. Quote Link to comment Share on other sites More sharing options...
TeaAndToast Posted December 27, 2012 Author Share Posted December 27, 2012 I have read many of the posts in the links. I can see where people have lost due to the decreasing house prices, but they would have lost out anyhow, and even less so with co-own. We have rented before and did not want to go down this route again. If we got a house at RV value would it not be a good time to jump in sometime soon if we thought the market was flat-lining? Otherwise we are just paying out money, if we co-owned at least 50% could be ours. My wage would also be saved to staircase. Quote Link to comment Share on other sites More sharing options...
Venger Posted December 27, 2012 Share Posted December 27, 2012 My wage would also be saved to staircase. Got limited knowledge of co-ownership/shared-ownership, but want to raise a point about staircasing. Isn't it possible staircasing and buying up more of a share in the property isn't sensible. If you got to 80% or even 100% then you'd need buyers prepared to pay your 80% or 100% in the future, if and when you ever came to sell. As buyers, you're not positioned to acquire more than 50% now (even though I don't think it a good idea), becuase of your financial circumstances. Likely the same you'll be limiting your market if and when you come to sell as well. And the price is likely inflated because of the 50-50 deal. I'd bet you could get it cheaper if offering to buy 100% now, were you able to do so. You'd also expose your own position to falling prices if you acquire more of a share. Quote Link to comment Share on other sites More sharing options...
Si1 Posted December 28, 2012 Share Posted December 28, 2012 and even less so with co-own. yes and no I believe is the answer Quote Link to comment Share on other sites More sharing options...
Guest_Belfast Fubar_* Posted December 28, 2012 Share Posted December 28, 2012 Hello, Many thanks for all those who have contributed to this forum, some great posts. My girlfriend and I have been thinking about going co-ownership because my past credit history is bad, and hers is quite good at 950 on Experian after new car finance. Our small deposit was wiped out by an act of nature. I can see the likes of Ulster Bank not requesting any deposit at 50% with co-ownership. But do they frown upon this when assessing? The co-own tool says we are able to go to 100K at 50%. Should we apply now or hold off as we could pull like £15,000 by Aug-Sept. Whilst house prices are still falling and showing no signs of bottoming out, renting is by far the best option. Quote Link to comment Share on other sites More sharing options...
Ausdave Posted December 28, 2012 Share Posted December 28, 2012 Hello, Many thanks for all those who have contributed to this forum, some great posts. My girlfriend and I have been thinking about going co-ownership because my past credit history is bad, and hers is quite good at 950 on Experian after new car finance. Our small deposit was wiped out by an act of nature. I can see the likes of Ulster Bank not requesting any deposit at 50% with co-ownership. But do they frown upon this when assessing? The co-own tool says we are able to go to 100K at 50%. Should we apply now or hold off as we could pull like £15,000 by Aug-Sept. I don't think the entire co-ownership deal is a bad thing. It allowed me to sell to a CO purchaser and us to move. I would recommend you keep your options open though. Every 1k you save now in cash and off falling house prices is worth much more to you in the future. How long do you have between submitting paperwork and having to complete. If it's open ended - then just submit your paperwork and hold fire. I would aim under RV, at least 15-20% and then at the present time it's good value. I doubt my sentiments will be mirrored by many, the majority on the site are anti co ownership and anti anyone purchasing unless they're long time HPCers. Quote Link to comment Share on other sites More sharing options...
righttoleech Posted December 28, 2012 Share Posted December 28, 2012 yes and no I believe is the answer What about maybe as a possibility? Quote Link to comment Share on other sites More sharing options...
TeaAndToast Posted December 28, 2012 Author Share Posted December 28, 2012 Got limited knowledge of co-ownership/shared-ownership, but want to raise a point about staircasing.Isn't it possible staircasing and buying up more of a share in the property isn't sensible. If you got to 80% or even 100% then you'd need buyers prepared to pay your 80% or 100% in the future, if and when you ever came to sell.As buyers, you're not positioned to acquire more than 50% now (even though I don't think it a good idea), becuase of your financial circumstances. Likely the same you'll be limiting your market if and when you come to sell as well. And the price is likely inflated because of the 50-50 deal. I'd bet you could get it cheaper if offering to buy 100% now, were you able to do so.You'd also expose your own position to falling prices if you acquire more of a share. The buyer would still need a mortgage for the full amount, if we owned 80% then the 20% would go to co-own at the current value. As far as I was told by UPS, we could go for any house they had on the market, so prices should not be inflated. Whilst house prices are still falling and showing no signs of bottoming out, renting is by far the best option. I would prefer to remain at home than rent to be honest. I was hoping prices would bottom out by summer 2013, I've no crystal ball mind, tho I did predict the property crash..... I don't think the entire co-ownership deal is a bad thing. It allowed me to sell to a CO purchaser and us to move.I would recommend you keep your options open though. Every 1k you save now in cash and off falling house prices is worth much more to you in the future.How long do you have between submitting paperwork and having to complete.If it's open ended - then just submit your paperwork and hold fire.I would aim under RV, at least 15-20% and then at the present time it's good value.I doubt my sentiments will be mirrored by many, the majority on the site are anti co ownership and anti anyone purchasing unless they're long time HPCers. I do not think its open-ended as you select a house, agree a price through negotiation and then forward this to their office for assessment. I guess you could always pull out at this point, but wouldn't want to do this as it could impact on future applications. In the Newtownabbey/Coalisland area most houses I had a look at last night were valued above the RV, to a point of around 10-20% above RV. So a 15-20% under RV is a bit of a push id say. Thanks for all the communication, helps a lot. Quote Link to comment Share on other sites More sharing options...
2buyornot2buy Posted December 28, 2012 Share Posted December 28, 2012 (edited) If you are going to buy a house in coalisland with co-ownership at 100k that's 20% over RV you need your head looked at. Given the info above i would say you'll be looking many years past summer 2013 before it "bottoms out". Co-ownership is a market prop. It offers little value when prices are dropping. Its really only for people who earn so little they shouldnt be buying. Edited December 28, 2012 by 2buyornot2buy Quote Link to comment Share on other sites More sharing options...
TeaAndToast Posted December 28, 2012 Author Share Posted December 28, 2012 If you are going to buy a house in coalisland with co-ownership at 100k that's 20% over RV you need your head looked at. Given the info above i would say you'll be looking many years past summer 2013 before it "bottoms out". Co-ownership is a market prop. It offers little value when prices are dropping. Its really only for people who earn so little they should be buying. Shouldn't be buying? The thing is it will be based on one income and not two, due to a bad mistake a few years ago on my part. I earn a good wage but will not be able to apply for a mortgage for about 3 years. Thus we have the money to pay off, but not just the acceptability level. I would never pay above RV, some sellers are deluded, but some are competitive. Quote Link to comment Share on other sites More sharing options...
2buyornot2buy Posted December 28, 2012 Share Posted December 28, 2012 Shouldn't be buying? The thing is it will be based on one income and not two, due to a bad mistake a few years ago on my part. I earn a good wage but will not be able to apply for a mortgage for about 3 years. Thus we have the money to pay off, but not just the acceptability level. I would never pay above RV, some sellers are deluded, but some are competitive. What was the mistake? IVA or bankrupt? Quote Link to comment Share on other sites More sharing options...
TeaAndToast Posted December 28, 2012 Author Share Posted December 28, 2012 What was the mistake? IVA or bankrupt? Not sure what IVA is but not bankrupt. Basically got a red strike when I finished university some 3 years ago. Stays on record for 6. Quote Link to comment Share on other sites More sharing options...
Shotoflight Posted December 28, 2012 Share Posted December 28, 2012 (edited) Co ownership is de facto government sponsored and promoted sub prime lending. You must prove you cannot afford the house before you can be accepted. Available up to £175k, with current average sale prices at £94k. Do you see yourself with your present girlfriend, on whose credit rating you rely, for the next 25 yrs? Have you agreed who gets and pays what if it doesn't work out? Will you both be in paid employment for 25 yrs? Will you have kids and good health? Difficult questions only you can answer, not very romantic and would also apply to 'mainstream' mortgage lending but the more you stretch, the more important these questions become - nevermind prices, interest rates and the economy. I don't have the answers - it may work for some and could be manipulated to suit circumstances (like IO mortgages for those that can work them to their advantage) perhaps, especially, if private rents are high and social housing non existant. Obviously thousands have taken up the offer over the years though the crash may cause particular difficulties in a scheme like this I won't put you off - just make sure you go in with your eyes open. Hope it works out for you - let us know. Edited December 28, 2012 by Shotoflight Quote Link to comment Share on other sites More sharing options...
TeaAndToast Posted December 28, 2012 Author Share Posted December 28, 2012 Co ownership is de facto government sponsored and promoted sub prime lending. You must prove you cannot afford the house before you can be accepted. Available up to £175k, with current average sale prices at £94k. Do you see yourself with your present girlfriend, on whose credit rating you rely, for the next 25 yrs? Have you agreed who gets and pays what if it doesn't work out? Will you both be in paid employment for 25 yrs? Will you have kids and good health? Difficult questions only you can answer, not very romantic and would also apply to 'mainstream' mortgage lending but the more you stretch, the more important these questions become - nevermind prices, interest rates and the economy. I don't have the answers - it may work for some and could be manipulated to suit circumstances (like IO mortgages for those that can work them to their advantage) perhaps, especially, if private rents are high and social housing non existant. Obviously thousands have taken up the offer over the years though the crash may cause particular difficulties in a scheme like this I won't put you off - just make sure you go in with your eyes open. Hope it works out for you - let us know. Been going together a long time. Both work in health with no expectations of closure. Both will pay 50/50 e.g. house costs £400, so we would put £300 each in per month, saving the rest for stepping up. Kids or health, who knows. But paying £300 each per month would not stretch us. We don't live a lavish lifestyle to be honest. Quote Link to comment Share on other sites More sharing options...
Guest_Belfast Fubar_* Posted December 29, 2012 Share Posted December 29, 2012 Been going together a long time. Both work in health with no expectations of closure. Both will pay 50/50 e.g. house costs £400, so we would put £300 each in per month, saving the rest for stepping up. Kids or health, who knows. But paying £300 each per month would not stretch us. We don't live a lavish lifestyle to be honest. I'm confused. Why, in your situation, would you not find somewhere to rent until you can buy a whole house rather than just rushing ahead to buy part of one now whilst house prices are still falling? Doesn't make any sense. Example- rent for £450, save the remaining £150 pcm. House prices will fall by around £5 - £10 K this year in your price range which covers your rent plus a bit. It is beyond me why you would rent part of a house. Just wait a bit and buy when you can. Quote Link to comment Share on other sites More sharing options...
Belfast Boy Posted January 2, 2013 Share Posted January 2, 2013 IIRC co-ownership you pay a mortgage on half and rent the other half. So you are still renting? Basically got a red strike when I finished university some 3 years ago. Stays on record for 6. It just seems the sensible thing is to wait for 3 years and save a bigger deposit without the complication and costs of the co-ownership scheme. And in 3 years house prices will be lower than they are now - saving you even more money. Quote Link to comment Share on other sites More sharing options...
TeaAndToast Posted January 5, 2013 Author Share Posted January 5, 2013 IIRC co-ownership you pay a mortgage on half and rent the other half. So you are still renting? It just seems the sensible thing is to wait for 3 years and save a bigger deposit without the complication and costs of the co-ownership scheme. And in 3 years house prices will be lower than they are now - saving you even more money. Both me and my partner are approaching mid 30's so really feel I need to leave the folks. We have enjoyed renting before, but couldn't make it a home. Yes we would be renting half, therefore if prices to fall 5% we are only losing out on half the money, perhaps 4K max. But we would have lost 15k from renting for 3 years in a place we could do noting too. We could also save in that time and buy part of the other half at the lower property prices after having the house revalued. Perhaps we are silly in the way we are thinking, but we can't see ourselves being stung to a significant degree, or are we missing something? Quote Link to comment Share on other sites More sharing options...
BelfastVI Posted January 7, 2013 Share Posted January 7, 2013 Co ownership is de facto government sponsored and promoted sub prime lending. You must prove you cannot afford the house before you can be accepted. Available up to £175k, with current average sale prices at £94k. Do you see yourself with your present girlfriend, on whose credit rating you rely, for the next 25 yrs? Have you agreed who gets and pays what if it doesn't work out? Will you both be in paid employment for 25 yrs? Will you have kids and good health? Difficult questions only you can answer, not very romantic and would also apply to 'mainstream' mortgage lending but the more you stretch, the more important these questions become - nevermind prices, interest rates and the economy. I don't have the answers - it may work for some and could be manipulated to suit circumstances (like IO mortgages for those that can work them to their advantage) perhaps, especially, if private rents are high and social housing non existant. Obviously thousands have taken up the offer over the years though the crash may cause particular difficulties in a scheme like this I won't put you off - just make sure you go in with your eyes open. Hope it works out for you - let us know. I dont agree this is sub-prime lending by the government or anything like it. For a start the government is not lending to anyone it is purchasing a % of a house. At the moment the government is trying to build lots of social housing (which is quite expensive the way they are doing it). One house houses one family. This way the government invests a fraction of what it costs to build and potentially removes someone depending on social housing. It also helps people to get out of the deposit trap where regardless of how cheap the house is few people have been able to save the large deposits. As for the staircasing its a choice to make. Ask yourself what you believe the house will be valued at in 5, 10, 15 years. If the mortgage and small rental is close to the rent on a similar property would be them I would advise you consider it. Quote Link to comment Share on other sites More sharing options...
Sour Mash Posted January 7, 2013 Share Posted January 7, 2013 I dont agree this is sub-prime lending by the government or anything like it. For a start the government is not lending to anyone it is purchasing a % of a house. That is effectively the same thing as a loan. The intention is that somewhere down the line, the co-owner buys out that percentage. It also helps people to get out of the deposit trap where regardless of how cheap the house is few people have been able to save the large deposits. If the owner can't organise their finances sufficiently well in order to save a deposit on even a 'cheap' house, perhaps they shouldn't be committing to taking on the responsibility of servicing a loan? If affordable home ownership is actually the goal, then let the market bring prices down to affordable levels as is currently happening. This scheme is nothing more than a way to attempt to prop house prices up with government cash which certainly doesn't help buyers. Quote Link to comment Share on other sites More sharing options...
2buyornot2buy Posted January 7, 2013 Share Posted January 7, 2013 I dont agree this is sub-prime lending by the government or anything like it. For a start the government is not lending to anyone it is purchasing a % of a house. At the moment the government is trying to build lots of social housing (which is quite expensive the way they are doing it). One house houses one family. This way the government invests a fraction of what it costs to build and potentially removes someone depending on social housing. It also helps people to get out of the deposit trap where regardless of how cheap the house is few people have been able to save the large deposits. As for the staircasing its a choice to make. Ask yourself what you believe the house will be valued at in 5, 10, 15 years. If the mortgage and small rental is close to the rent on a similar property would be them I would advise you consider it. Of course it is government sub-prime lending. The government borrow the money, pay staff to administer it and take a loss on the repossessions. It's just they are borrowing the money themselves from commercial banks. It is just like bank mortgage lending except the bank have the first charge, in this case co-ownership do not. The co-ownership HA and but extension us take all the lending risks and future losses but little of the rewards. Did you know there were around 50 co-ownership repossessions last year on 450 sales? The association made a loss of around £2.5 million. Quote Link to comment Share on other sites More sharing options...
2buyornot2buy Posted January 7, 2013 Share Posted January 7, 2013 This doesn't help buyers, but I can see how you would like it BVI - with transaction levels 70% off peak. Quote Link to comment Share on other sites More sharing options...
BelfastVI Posted January 7, 2013 Share Posted January 7, 2013 This doesn't help buyers, but I can see how you would like it BVI - with transaction levels 70% off peak. It is there to help buyers who otherwise would not be able to purchase. Yes, as a builder of houses I well welcome any sustainable method of allowing purchasers to purchase. A return to 10% or even 5% deposits would be more attractive. I am also quite happy for the government and Housing Associations to totally fund the construction of new houses which must be built by the industry. However, as a taxpayer I would encourage co-ownership as it consumes less of the public purse (all ow which is returned). Quote Link to comment Share on other sites More sharing options...
BelfastVI Posted January 7, 2013 Share Posted January 7, 2013 Of course it is government sub-prime lending. The government borrow the money, pay staff to administer it and take a loss on the repossessions. It's just they are borrowing the money themselves from commercial banks. It is just like bank mortgage lending except the bank have the first charge, in this case co-ownership do not. The co-ownership HA and but extension us take all the lending risks and future losses but little of the rewards. Did you know there were around 50 co-ownership repossessions last year on 450 sales? The association made a loss of around £2.5 million. The company has a net worth of £100m. Whilst not explained in the accounts I assume this has accumulated as a result of increased in its stock value over the 20 or so years it is in existence. The government gets all its money back. It does not take a hit house by house. When a house is sold the full Grant has to be repaid. Co-ow made grant repayments last year of £1.5m, repaying the gov in full for the grant on those houses. The Co-ownership shares in the rewards of stair-casing when values have increased from the value at the purchase date. The government does not pay additional grant in running costs. The Co-ownership. like other HA charges rent on the parts of the houses they own and use this to pay running costs. Quote Link to comment Share on other sites More sharing options...
2buyornot2buy Posted January 7, 2013 Share Posted January 7, 2013 The company has a net worth of £100m. Whilst not explained in the accounts I assume this has accumulated as a result of increased in its stock value over the 20 or so years it is in existence. The government gets all its money back. It does not take a hit house by house. When a house is sold the full Grant has to be repaid. Co-ow made grant repayments last year of £1.5m, repaying the gov in full for the grant on those houses. The Co-ownership shares in the rewards of stair-casing when values have increased from the value at the purchase date. The government does not pay additional grant in running costs. The Co-ownership. like other HA charges rent on the parts of the houses they own and use this to pay running costs. Have you actually read the 2011 accounts or just a marketing leaflet? I'm thinking not. Quote Link to comment Share on other sites More sharing options...
BelfastVI Posted January 7, 2013 Share Posted January 7, 2013 Have you actually read the 2011 accounts or just a marketing leaflet? I'm thinking not. Glanced through it. Can you highlight where I have misunderstood. Quote Link to comment Share on other sites More sharing options...
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