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are there any benefits in it? I just can't see it myself, or are we being too gloomy?

New builds created specifically for key workers are usually well over priced and as a consequence of being with other key workers usually increase in value less than any other properties, a step up from army camps? Other shared ownership schemes, were you own only a part with perhaps the builder owning the other share, is simply a method by which the builder protects and locks in their value at the loss to the buyer who should be getting twenty per cent off. If you buy on a 60/40 split are you not buying instant 20% negative equity if the price is not discounted?

Although you only pay half value by way of a mortgage you still have to pay rental on the other share..what's the point? Either buy, or rent. Surely renting from the private sector, particularly those who are desperate for tenants, (BTL investors :lol: ) whilst saving up a 'dipper' is a better strategy?

Is the belief that it actually makes you feel part of the home owning democracy the only appeal 'cos financially it does not make sense? Any other thoughts, as I can't see any 'up side' for shared ownership.....? <_<

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For many people shared ownership will be the only way they can afford to make an investment in property. The payment on the rented element is subsidised by the housing association - you pay only about 1/3 of what the mortgaged share costs each month which will be well below the market rent. You also have more security of tenure and the HA is likely to be more sympathetic than a private landlord if you fall on hard times.

If there is crash you will be able to purchase the rented share more cheaply - if prices shoot up again you have at least got some equity on the part you own. In that sense it is probably less risky than buying an entire property at the moment.

There are a lot of problems with shared ownership - I would be very wary about buying a new build at all and you cannot choose who you sell to - but for many people it is the only option on the table if they don't want to rent for ever.

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For many people shared ownership will be the only way they can afford to make an investment in property. The payment on the rented element is subsidised by the housing association - you pay only about 1/3 of what the mortgaged share costs each month which will be well below the market rent. You also have more security of tenure and the HA is likely to be more sympathetic than a private landlord if you fall on hard times.

If there is crash you will be able to purchase the rented share more cheaply - if prices shoot up again you have at least got some equity on the part you own. In that sense it is probably less risky than buying an entire property at the moment.

There are a lot of problems with shared ownership - I would be very wary about buying a new build at all and you cannot choose who you sell to - but for many people it is the only option on the table if they don't want to rent for ever.

You wouldn't have a shared ownership wife, and I don't see why you would want a shared ownership house.

:(

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For many people shared ownership will be the only way they can afford to make an investment in property.

Property is not an investment.

Houses are for people to live in, not to invest in or hoard.

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The whole point of shared ownership is that you are treating property as a home - people who already own other properties don't qualify!

Also I expect that the majority of people - particularly those with kids - would like to be in a situation where they have security of tenure - not being told suddenly to move out and find another place with only two months notice as could be the case if they are renting. I am not saying it is a panacea - merely that if prices stay as they are this is the only option for the majority of people who don't qualify for council housing and would like some security in where they live.

Werewolves - anyone getting a mortgage shares ownership with the bank in effect until the mortgage is paid off so I don't really get your point!

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The whole point of shared ownership is that you are treating property as a home - people who already own other properties don't qualify!

Also I expect that the majority of people - particularly those with kids - would like to be in a situation where they have security of tenure - not being told suddenly to move out and find another place with only two months notice as could be the case if they are renting. I am not saying it is a panacea - merely that if prices stay as they are this is the only option for the majority of people who don't qualify for council housing and would like some security in where they live.

Werewolves - anyone getting a mortgage shares ownership with the bank in effect until the mortgage is paid off so I don't really get your point!

I reckon the security of tenure is appealing, as is the feel of home ownership. Other than that I'm struggling to find any merits in shared ownership..... <_< I suspect this will become a huge media issue as builders look to off load huge amounts of empty undesirable stock, where beter than to the quasi social sector. Personally I havn't any anecdotes of folk doing OK out of shared ownership. You mention council property, may as well live in council property and then exercise your right to buy, if, as you say, you qualify.

Edited by Converted Lurker

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I think the main issue with it is that, and this is true of the shared ownership schemes I have seen advertised: the cost of 50% shared ownership is not roughly 50% of the market value of the property - it seems to be closer to 65%.

For example - in Preston - in a row of 2 bed terraces: market value 110k, shared ownership 70k: not 55k.

So the vendor gets 130% of market value for precisely the type of property most likely to be hit in a downturn (e.g. 1 bed maisonette).

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I reckon the security of tenure is appealing, as is the feel of home ownership. Other than that I'm struggling to find any merits in shared ownership

Mirrors my view. We are eligible for this scheme but would not touch it. I would consider homebuy but only after the market fell and use the loan to reduce costs and invest our house deposit!! Just need to remember to pay it back before the market takes off again!

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I think the main issue with it is that, and this is true of the shared ownership schemes I have seen advertised: the cost of 50% shared ownership is not roughly 50% of the market value of the property - it seems to be closer to 65%.

For example - in Preston - in a row of 2 bed terraces: market value 110k, shared ownership 70k: not 55k.

So the vendor gets 130% of market value for precisely the type of property most likely to be hit in a downturn (e.g. 1 bed maisonette).

Hit nail on head for me ;)

Mirrors my view. We are eligible for this scheme but would not touch it. I would consider homebuy but only after the market fell and use the loan to reduce costs and invest our house deposit!! Just need to remember to pay it back before the market takes off again!

Shared ownership is an option, but not a solution appears to be the overall opinion. I reckon it'll be pushed as those close to the housing minister get aggresively lobbyed by the house builders <_<

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I am probably looking at this from a London position - I would not touch shared ownership in Preston or indeed anywhere else outside the south east.

Local residents on salaries of £65k qualify for shared ownership in Kensington & Chelsea - no way they could buy even the dodgiest one bed flat in north Kensington otherwise!

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As a developer who specialises in shared and low cost home ownership schemes, I can tell you that it is rubbish.

Sorry, Mondays...

OD

Please elaborate, either on here or pm me, I'm genuinely looking for good arguments for, can't see it myself but always willing to be proved wrong :)

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From More Home and Sensible Loans

Shared Equity and Key Worker Schemes (HomeBuy and Key worker living)

The fact that these schemes exist at all are a fundamental admission from the government that high house prices are causing serious economic damage.

We believe the government's response should be focussed on improving the affordability situation for everyone and not subsidising individuals who it "prioritises". Any response which targets individuals is merely papering over the cracks of a significantly bigger problem.

Consider this... every recipient of one of these schemes who buys a home on the open market is most likely keeping some other unsubsidised family out of the market.

This brings us to the most important question, why should tax payers subsidise current house price levels when they are causing so much economic damage?

Priced Out want the government to focus on the core issue of house price affordability and stop subsidising current house prices with public money.

More to the point the detrimental side of shared ownership is this. If you spend 25 years paying off a house and then only own half of it what happens next. Do the bank/lender let you live on there rent free? Of course not.

So fundamentally Shared Ownership is a way of keeping you in more debt for longer.

Edited by DoubleBubbleTrouble

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Please elaborate, either on here or pm me, I'm genuinely looking for good arguments for, can't see it myself but always willing to be proved wrong :)

Hello there -

Most of the negative points have been posted here already (property overvalued in the first place, difficult to move on when you want to, rent on the outstanding balance etc), but the real issue – and one that first emerged ‘last time round’ - was the need for this type of scheme at all. Bending the rules to enable people to continue to buy houses is why this site exists in the first place.

The criteria for buying one of these homes basically means that you are low income / key worker, but with little or no outstanding debt. That means that you say good bye to students as a buyer for starters. This leave Housing Association list people, teachers (who were students once so not many of those), medical professionals (ditto), and some police and fire folks.

This essentially means that a majority of people who are buying in to this type of scheme are very vulnerable to a change in economic circumstance (be it IR’s, unemployment, kids etc), and it wouldn’t take much before the repayments to become an issue. I can’t help but feel that the companies who manage these properties are positioning themselves for this very eventuality.

It just stinks is all, and (having reread what I have just bumbled out onto the page) I am having trouble voicing my true concerns. Uneasy is the best word I think – the rules of good lending have been in place for a reason, and now they are being pushed aside to help HPI continue. This makes no sense to me – negative equity is negative equity – and if you have an equity stake rather than the whole thing then it is double sad to get duped as it is obvious that you’re not rolling in cash in the first place.

Still Monday, is it?

OD

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  • 301 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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