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Sylvester83

Shared Ownership For Less Risk?

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reading this forum one can get the idea that soon the bubble of house prices will crash and that buying now is for idiots who would get massively in-debt for peanuts.

Do you think then that buying a shared ownership is a better strategy?

It would be possible to buy a 25% share with a mortgage, buying another 25% per cent just after few months with the cash I would have used for the deposit in a normal purchase..

then I could just wait for the crash to happen so that I can buy the other 50% at lower price since the price is chosen at the current market value.

if the crash does not happen I can always save and buy more shares little by little.

Would that be a sounded strategy even for the common thinking in this Forum?

It looks less scary to my eyes.. the only problem is that I cannot rent until I buy it all... but it looks a less scary thought then get a massive debt with a possible bubble burst. ?

I am just trying to get a culture about properties because I was/am indeed very ignorant about this.

Thanks

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Maybe.

The issues with shared ownership is that it seems to be a half way house between full ownership (with a mortgage) and renting. Carrying a lot of the disadvantages of both. i.e.
- Hard to move if you have to, well harder than renting and possibly than as a mortgage holder.

- You can't necessarily sell at the price you think it is worth you need agreement with the housing authority (or whoever the shared ownership scheme is with)

- You are responsible for the maintenance, okay granted most landlords don't seem to do any, so it may not be an issue unless something really significant happens to the property.

- There are less mortgages on offer which are compatible with shared ownership, so you will probably have a higher rate than getting a normal mortgage, so something to factor in to your calculations.

- You can't modify the house as freely as you could with a regular mortgage. It might depend on the shared ownership scheme, so check over the small print. If you never plan to do anything drastic (moving walls around, driveways or any of the other permitted development type activities) it may not be an issue to you.

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Thanks for your reply, much appreciated.

- There are less mortgages on offer which are compatible with shared ownership, so you will probably have a higher rate than getting a normal mortgage, so something to factor in to your calculations.

the fact that I will need a much smaller mortgage (25% of the full value rather than 80-75%) balances the thing though, doesn't it?

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Most if not all of the shared ownership properties that I've seen advertised were massively overpriced. Like £60k for 25% when £150k gets you 100% of a similar property close by.

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the other party doesnt have to sell you anymore of the property than it wants to. what i am saying is if there is a 50% crash the day after you buy, and you approach the other owner, they can refuse to sell part or all their share at any price.

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the other party doesnt have to sell you anymore of the property than it wants to. what i am saying is if there is a 50% crash the day after you buy, and you approach the other owner, they can refuse to sell part or all their share at any price.

I will definitely make those question on launch day.

Thanks for mention it

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