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Shared Ownership

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A friend is looking at shared ownership either £41,250 on a £165,000 or £35,000 on a £140,000 house (works out at 25% on both)

They have about £38k cash to put into it, obviously they enough for the smaller house, if you were in the same situation would settle for that or go for the bigger house and it might be a really dumb question but what would be the best way to finance the extra?

The rents work out rather cheaply (certainly way less than renting comparable houses!).

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A friend is looking at shared ownership either £41,250 on a £165,000 or £35,000 on a £140,000 house (works out at 25% on both)

They have about £38k cash to put into it, obviously they enough for the smaller house, if you were in the same situation would settle for that or go for the bigger house and it might be a really dumb question but what would be the best way to finance the extra?

The rents work out rather cheaply (certainly way less than renting comparable houses!).

To be honest I've always looked at shared ownership as a bad idea. All the downsides of owning a home and none of the benefits of renting. If you want to move you have to find someone to buy your 25%, just how easy will that be?

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To be honest I've always looked at shared ownership as a bad idea. All the downsides of owning a home and none of the benefits of renting. If you want to move you have to find someone to buy your 25%, just how easy will that be?

The thing is they can't really afford to rent, its just way too expensive in the area where they work, its not a short term thing and they will be wanting to increase their stake as they go along. So my thinking is possibly go for the bigger house so they won't grow out of it.

I know round here in the South East its madness unless you have a hefty chunk of money to put in.

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Use some of the 38k (or better, it\s interest or other yield) to help pay the rent on a nice place?

They have pets which make rental difficult, plus the rental properties in the area are at silly prices and look to remain so

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They have pets which make rental difficult, plus the rental properties in the area are at silly prices and look to remain so

Shared ownership is rarely a good idea. As above, you get all the disadvantages of owning and none of the advantages of renting.

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In general i think for property that bigger is best . If they are both in the same area then the one which is bigger is most likely to be easier to sell unless it is in a much worse state than the smaller one .

PS Shared ownership may not be the best think in the world but there are areas of the country in which this is the only feasable option so dont let negative comments put you off :rolleyes:

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In general i think for property that bigger is best . If they are both in the same area then the one which is bigger is most likely to be easier to sell unless it is in a much worse state than the smaller one .

PS Shared ownership may not be the best think in the world but there are areas of the country in which this is the only feasable option so dont let negative comments put you off :rolleyes:

What he said. Maybe get a personal loan for the difference.

There are many disadvantages with shared ownership (responsible for all the maintenance even though you're paying rent, tremendous diffculty in selling) but if you look at it as a tenant-maintaining rental with total security of tenure for a reasonable price then it's fine.

The only time I would say to somebody definitely don't buy one is if they don't intend to stay there for a long time because of the tremendous difficulty in selling a SO.

Tbh if there was a really nice one then I would consider sticking down 10%, regarding it as a cheap rental and as it will be a HA build it will have a very high build standard so whilst I'm maintaining I won't have much to do.

If then in ten years time I want to move then losing a percentage of my 10% down is no big deal.

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A friend is looking at shared ownership either £41,250 on a £165,000 or £35,000 on a £140,000 house (works out at 25% on both)

They have about £38k cash to put into it, obviously they enough for the smaller house, if you were in the same situation would settle for that or go for the bigger house and it might be a really dumb question but what would be the best way to finance the extra?

The rents work out rather cheaply (certainly way less than renting comparable houses!).

RUN AWAY!

Shared ownership is a terrible idea.

38K is enough for a deposit for the whole house.

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RUN AWAY!

Shared ownership is a terrible idea.

38K is enough for a deposit for the whole house.

They can buy further shares in the house when they have more money so end up owning it entirely.

Buying a shared ownership property is not the disastrous decision that some on here would paint it. It can be but if you intend to live there for many years, are in a stable relationship (or rather not sharing a tenancy when in an unstable one), and are likely to have an increase in income so you can buy up the remaining share over time then it can work.

Though I agree that for some people it is a terrible idea. Anybody who regards it as a starter home will get their fingers burnt.

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They can buy further shares in the house when they have more money so end up owning it entirely.

Buying a shared ownership property is not the disastrous decision that some on here would paint it. It can be but if you intend to live there for many years, are in a stable relationship (or rather not sharing a tenancy when in an unstable one), and are likely to have an increase in income so you can buy up the remaining share over time then it can work.

Though I agree that for some people it is a terrible idea. Anybody who regards it as a starter home will get their fingers burnt.

When you buy you buy at THEIR price

When you buy more shares it's at THEIR price

When you sell it's at THEIR price (the have to try and sell it in the first place as an 'affordable house')

I looked into it a few years ago and found i could only get a 2 bed flat as I hadn't any children, so i would have at some point in the near future had to sell it and buy another house.

Good points:

Low deposit OK

Low income OK

When they sell it you don't need to pay EA fees(unless they fail to sell it then the responsibility is yours)

slighter cheaper than renting or paying a good size mortgage.

Basically, like HTB, it sounds better than it is.

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When you buy you buy at THEIR price

When you buy more shares it's at THEIR price

When you sell it's at THEIR price (the have to try and sell it in the first place as an 'affordable house')

I looked into it a few years ago and found i could only get a 2 bed flat as I hadn't any children, so i would have at some point in the near future had to sell it and buy another house.

Good points:

Low deposit OK

Low income OK

When they sell it you don't need to pay EA fees(unless they fail to sell it then the responsibility is yours)

slighter cheaper than renting or paying a good size mortgage.

Basically, like HTB, it sounds better than it is.

THEIR = independent valuer whose valuation the seller has to accept.

Most of these units are sold at a small loss. There isn't a con but they are certainly not suitable for everybody. Buy a shared ownership if you want to make it your home for a long time, otherwise rent.

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THEIR = independent valuer whose valuation the seller has to accept.

Most of these units are sold at a small loss. There isn't a con but they are certainly not suitable for everybody. Buy a shared ownership if you want to make it your home for a long time, otherwise rent.

Thanks for the positive comments.

The situation is my friend is just divorced, in their early 40's was in their last place for 10 years. They don't really want to have move again if they can help it so its a long term thing

They have gone for it (nice location and the last one left, other Shared Ownership houses in the surrounding area won't be ready for at least a year). Its a brilliant quality new build by a builder who is know more for top end developments, and most of all its in a good location.

The rent part is fairly cheap and will get cheaper as they are able to buy the next part.

As for normal renting, well its very expensive area, plus I have another friend within 10 miles who rents and seems to have to move every 18 months (not their choice) which is costing them money.

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