rmtypeR

I'm thinking of getting myself on the property ladder through buying a shared ownership house scheme (40% ownership, 60% rent for the time being). Has anyone out there done this recently? Any advice gratefully receieved.

One question in particular, is the price that the house has been valued, and the % rent etc calculated on fixed, or is it like buying normally where you would generally offer a bit less than the asking price? I don't want to spend anymore money than I have to!

Thanks.

Petem95

Shared ownership, come on

This is a real last-gasp attempt at maintaining the current over-inflated property prices, and extracting some money from poor FTB's who've been brainwashed into thinking they "must do WHATEVER IT TAKES to get on the property 'ladder".

What happens when you want to sell up? Who decided on how repairs are done?

Would you not be better off renting or living with parents and saving up for a house deposit so you can actually buy one? And remember prices are going to be level/falling slightly AT BEST and at worst fall fairly significantly.

And when was the last time shared-ownership was being pushed?... just before the last property crash...

rmtypeR

Living in the south east means that I'm currently a long way from being able to afford to buy outright. Now if I'd of brought back in 1998 when I first thought of it - it would have been a different story!

Having been renting for over a year already, I've decided that shared ownership is the lesser of 2 evils, as unless prices drop by at least 30% I won't be able to buy outright. Also, the rent is significantly lower than the mortage would be (i.e. the mortgage per month to buy 40% is more than the rent on the remaining 60%) enabling me a live in a nicer house.

I feel that while no-one can really predict whether prices will continue rise or will drop in the future, I risk being completely left behind if I don't do something soon. Time will tell I guess....

Petem95

Like you say nobody can predict the future, but when you are renting you will be saving money remember.

And look at whats happening with interest rates in the US, Japan and EU - all going up - US upto 4.5%, and will be 5% within 6months. EU have said they want to return to longterm average rates or 4-5% (currently 2.5%) and Japan is on about raising rates too.

Basically means our rates will rise too because otherwise our currently will fall in value. Thats bad news house prices. So is constantly increasing unemployment, inflation due to increases in council tax, petrol, oil, gas electricity etc etc.

Think really hard before you commit to 'shared ownership'!!!

rmtypeR

I do think house prices are at a ridiculous level. Even though I'm earning a little below the national average I'm in a stable, professional job (IT hardware engineer), and I'm looking at spending at least half my net monthy income on a mortage just to be able to get the grottiest, smallest flat in the not so nice areas. Doesn't strike me as very good value.

The way I look at it, the total amount I'll be spending on shared ownership will be only a bit more than I'm paying in rent at the monent. I'm currently spending £6k a year on rent, at least with shared ownership that will halve and the rest of the money will eventually come back to me. And if property values do drop I'll only be making a loss on 40% as opposed to the full amount.

Jay m A

iTrader: (2)

But what about when it comes to resale? it'll be like trying to shift a pink impreza

rmtypeR

Resale shouldn't be a problem as you just sell your % share back to the housing association. You have to pay for the vaulation though.

fast bloke

Shared ownership is OK if you have no other option left. The biggest pitfall occurs when prices are rising. Most people never get to the point where they can but out the housing association as the buyout price is based on the market value at buyout time. You make offers in the normal fashion, then get a mortgage for 40% and the housing association buys the rest, so both the mortgage company and the housing association need to agree that the house is worth the purchase price. The rental is then fixed on the amount the association have to put in. If prices do crash after you buy, you get to buy out the housing association at a reduced rate..... every cloud and all that. There are plenty of lenders who do this type of mortgage, but Leeds & Holbeck are usually fairly competetive

rmtypeR

Thanks for that fast bloke - I'm going to view somewhere tomorrow and I wanted to know if I should just accept their valuation or if I could offer a bit less.

fast bloke

Offer at least 10% less. The hardest bit is calling the market. If you think there will be loads of bidders offering over the asking price, offer the asking price but put an 8 hour limit on the bid. If you think there will be no-one else interested, offer way less, leave the offer open and make them sweat

hades

There shouldn't be many places where you're getting loads of people offering over asking price at the moment, IMHO - but local conditions will have a big impact rather than just general "it's a buyers market" type comments.

As for the house price crash - a 30% drop in about a month's time would see me very nicely thanks (spot the person who's moving to temporary rented accommodation after selling one property before buying the next . . . )