Shared Ownership Scheme

[shellbell1988]

hello! just wondering if anyone has ever purchased a % of a flat/house on a shared ownership scheme. is it a good idea and are there any pros/cons? i'm looking to move out of my parents, but building up a deposit big enough to get a mortgage is proving difficult. Thanks for your help shelley x

 

[Ruth Mills]

We almost did back in 2004 - there was a house we were looking at that was part of a shared ownership development that used to be an old school building; however the restrictive covenants were really strict and didn't allow any pets! Which was a total deal-breaker, as we had 4 cats between us at the time and were looking to get a dog as well (we now have 7 cats and 3 dogs)!

But other than that, it seemed like a good idea; we ended up spending an extra 60K on the house we finally went for compared with the shared ownership one!

 

[number1kitty]

They do have rules about changing things in the house too, like if you want to build a conservatory etc. To be honest most places including council houses state no pets but I doubt they have ever evicted anyone for breaking this rule providing you make good any damage. And boy did my Pug do some damage to a kitchen in a council house!

Always bought my houses outright so never done this sort of scheme before but have looked into. I would go for it, however look for the schemes barratts etc are running where you get 25% of the value postponed for ten years or until you sell the house. Thats a far better scheme I would say as at least the house is yours! Housing associations though will be responsible for their share of repair bills so there are swings and roundabouts!

Kate

 

[Zo Zo]

I have some experience of this as my Mum bought one when she first separated from my Dad, and also my ex got one when we broke up.

I think they are a really good idea, as a stepping stone, but a few things:-

If it's a flat or maisonette, you will be liable for a maintenance charge and insurance. For Richard my ex the maintenance charge was REALLY high! Especially bearing in mind the communal parts were very basic and there was no garden or parking. And of course with the insurance, as far as I know, he had to pay it through them, there was no option to shop around for a cheaper deal.

My Mum's bug bear was that her rent went up every year without fail. And she was worried that in the long term she wouldn't be able to afford it. Esp. if she was still there when she retired. (That didn't happen )

I also think, the values of the properties seem inflated. As an example, a flat could be valued at £160k so a 25% share would be £40k, but in reality, on the open market you would get an equivalent flat for a lot less.

Richard definitely had a cat in his flat. My Mum has always had loads of pets.

The other thing to consider is that you do still need a deposit and your legal fees etc for a shared owndership scheme. And sometimes you also have to pay a premium, I think my Mum's was 10k and that was years ago.

However, on the plus side, I think you would feel much more like you were living in your own place, rather than rented, and you would also benefit from any increase in equity.

For Richard, it got him out of a scummy bedsit and into a brand new flat with appliances and carpets etc, and for my Mum, well years ago there were a lot less options anyway, but it got her a big enough house in a good area for the period she still had kids living at home.

If I were you, I would phone your local council and get an application form sent to you. I did Richard's for him and within 2 months he had an interview. You have nothing to lose by attending an interview and finding out what they can do for you, and how the contract works.

The schemes are normally run by housing associations rather than councils, but where I live, it is the council you go to, to get information.

Hope that helps.

 

[shellbell1988]

Thanks for your help everyone. I have contacted the council there is a 2 bed flat in the area I am looking to live in. I will be phoning tHem tomorrow to get some more info xx
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[Urban Geek]

My first flat was purchased on a shared ownership basis (50-50). Any improvements I made were reflected and knocked off the amount I had to pay when I bout the other share of the flat.

For me it was a great system that helped me get my foot on the ladder in the area I wanted.

I did DYSO (Do it yourself shared ownership). Most shared ownership properties are newbuilds where the builder has allocated the properties to a local housing corporation. With shared ownership normally the properties have to be less than 10 years old.

With DYSO I could purchase anywhere in England or Wales. The property could be of any age so long as it passed the survey. The proportion of the property I bought or the price of the property I could buy varied according to where I bought. For example, if I bought in Nottinghill I would have purchased a smaller share of a more expensive property. I bought in Essex a larger share of a cheaper property. Hope that makes sense.

Good luck!

 

[Zo Zo]

I think that's what my Mum did too - DYSO - as hers definitely wasn't through a housing association and it wasn't a new build. But nowadays housing association schemes are more common, and they are often for people who fit certain criteria i.e. nurses, firemen etc

One other little thing.. my ex was only 'allowed' a one-bed flat. The housing association said he couldn't have a 2 bed as his daughter didn't live with him full time