Ash23

This is my 1st post here on scoobynet, ashame its about the property ladder and not an impreza. I thought i'd sign up and ask as there seems to be a lot of good knowledge and advice on this site.

As you can probably tell im young and im finding it extremely difficult to get onto the property ladder. I currently earn £28k annually which isn't too bad a wage being 23.

I currently rent a 3 bedroom property for £650 a month but i'm getting fed up at paying someone else's mortgage! Its time to get onto the property ladder while there is still a chance! With the way house prices are going, in a few years its going to be near impossible, house prices are just continuously rising! Good if your on the property ladder, but a ****ter if you are not!

Current average national wage circa £24000. Current national average house price £170000. Something quite dont add up as that is 7 x salary

I can afford £650 a month no problems and i would like to stay around that mark for mortgage payments. Now £650 a month only gets you around a £100000 mortgage which i would have to move into a 1 bedroom flat instead of the nice 3 bed house im renting at the moment so that is not an option!

I am not getting into the property ladder to make money, only somewhere to live! If the house price rises then so be it, it will be a bonus but i couldnt care less about making x amount of profit after x amount of years!

Now here is my question, i have seen a 3 bedroom property with a 50% shared ownership at £82500 and i would have to pay a further £140 rent monthly! (All in all it would cost around the same £600-£650 that i am paying at the moment but the bonus being i am actually paying into something that benefits me and not someone else) Just a few questions and advice needed really.

Can i eventually buy the other 50% and would i buy it at the current price or the market price at the time?

If the house did make a profit, say in 5-10 years time would i share the profit 50-50? If the house was worth £250000, would i be entitled to £125000?

If at the moment they are asking for £82500, can i put in a lower bid? Say £77500?

Will i need to pay the stamp duty and all the other fees, remember the house is worth £165000

Question 5 and final question............Is it the only way young 1's like me can get on and get a decent house and not a dingy 1 bed flat!

Thankyou in advance

KiwiGTI

Pretty much, it's all due to the greed of the middle classes and New Labour. Social things such as housing have never been a priority for this government.

TopBanana

The rallying cry of the fool, soon to be parted with his money.

House prices will not rise much further, and I think they will reduce by as much as 50% in real terms over the next 5 years.

You'd be mad to buy your first house right now.

Petem95

That sounds like it came straight out the Estate Agents/Mortgage lenders mouth

Shared ownership sounds like a very bad idea IMO - what happens when you want to sell? What happens when repairs are needed, and the other owner has no money or thinks you dont need repairs? Way too many pit-falls.

Best bet is go back and live with parents - save up a shed load of cash, and move abroad and buy there! Seems like the best bet for younger generations who dont want a lifetime of debt for a 1bed ex-council studio, despite above average salary

Ash23

Not a fool buddy, just dont see another way! With all due respect to your reply, that is exactly what i was told back in 2003 when i started renting! 3 years on and i wish i had now bought back in 2003!

Reading news articles this week, house prices just keep rising! When will it all stop? This is what i was saying to myself 3 years ago! Do i take the risk and keep paying off someone elses mortgage so dead money in respect or do i bite the bullet and do something about it, even if it is only 50-50?

A housing association would own the other 50%, not a private silent partner!

Simon C

I'm in the same boat mate, but a few years older then yourself. The only way I can see is either go down the route of your post, or 2 incomes ie partner, and that really gets my goat!! The 3rd option is a morgage 4 - 6 x my salary, which is ok in principle untill the intrests rates rize then its a 1 track line to bankrupcy.

First time buyers get screwed big time

TopBanana

Your situation 3 years ago will not influence the housing market. Do you think we've now entered some new miraculous economic age where house prices can rise beyond the reach of everyone?

You shouldn't believe everything you read. How much do you think house prices have increased over the last year?

Ash23

My missus wants to have a baby soon so it will all have to be done off my wage! I probably can get a £150-160000 mortgage using our joint income but at what cost? When we have a baby i'll be the 1 paying the whole mortgage off my wage!

Why pay £1000-1100 on a mortgage (Rough guess?) and leave yourself skint? I dont get that, you only live once, why be poor for 25years, not being able to have a nice car or go on holiday?

1 of my friends is paying £1000 a month mortgage on a £1600 wage! Council tax and other utility bills along with food and car costs and he doesnt have a penny left, he used to always be down the pub at the weekend, but i hardly ever see him now! What's the point?

Speak to a lot of the older generation now and they pay like £200 a month on their mortgage with a home the size of buckingham palace. They wonder what it is all about!

john banks

Keep renting is the first thought that occurs to me.

Ash23

Are we not already at that stage in london. Teachers/police even doctors cannot afford to buy! What hope is there for the average joe who works in tescos or in a call centre?

The rest of the uk, i think will come closer in touch with london! If a 1 bedroom flat in london costs £175000, whats unreasonable about a 1 bedroom flat in say hampshire fetching that much? Berkshire and house prices are coming in line with london already.

scoobyangel

i had a shared ownership house a few years back... answers are... yes you can buy the other half, can even buy it % stages if you wanted to i.e 25% in 5 yrs and 25% again 5yrs after that.. it isnt too hard to buy the other half, and when i bought the other 50% of mine, i got it for the same price i origional paid for it even tho it had risen in value by 30k.
when it comes to repairs etc, the housing assc that owns the other half include the buildings insurance in their part so you only have to insure contents, and any repairs i had done were done by them as it was a new build.
only downside is, the rent increases every year, and if you can never afford to buy it outright you will have the hassle of selling only a part of it!

Ash23

Why though, i see it as dead money. Im paying someone elses mortgage!

To me that does not make sense! In 10 years if i keep renting i will have nothing to show for it. In 10 years on a 50-50 basis at least i'll have 1/2 a house!

Surely 1/2 a house is better than nothing

molko

Look mate, you moaning on here about the prices of houses is not gonna change anything. If you need to buy a house then bite the bullet and do so ! Maybe you should have bought a house 3 years ago, maybe you should wait another 3 years.

You know how much you can afford, you know how much houses are, just DEAL WITH IT !

Ash23

Im not moaning buddy, just after advice from people that have experience of shared ownership or are perhaps in the same boat as me!

molko

Yeah, sorry if i sounded off a bit. I'm in a similar boat, me and the missus already have a house but want to move to somwhere a bit bigger. We have similar concerns about how much to borrow etc.. At the end of the day you just have to do what you thinks right. I guess if you are having kid soon, then a roof over your head is quite important.

Good Luck

davegtt

Half an house is better than nothing, ignore the joker saying houses will drop by 50% over 5 years. Not going to happen. Overall the 50/50 scheme isnt a bad one, the misses sister and her bloke are doing it at the moment and I have a friend who has just moved into his 50/50 property. Its not an entirely bad way of going about it. There are clauses in the contract though regarding stuff like selling it. Cant remember exactly but think its the whole amount of profit goes to the government in the first year of ownership, if you own the property for a year and then decide to sell any profit gets split 50/50.... Almost sure thats right.

Good luck with your decision. Quick one though, where are you based and what type of job do you do? no chance of relocating? Were in a nice area earning reasonable money (not far short of yours) with a 3 bed semi for £140k you can actually find cheaper properties aswell if for example they didnt have a garage or something.

Petem95

House prices are a big problem in the UK. The amount of professional couples having kids is very low now as they cant afford to buy a home to provide them with some stability while they bring up the kid - and even if they could afford a little place, theyre unlikely to be able to trade-up in future as it would require finding so much money!

Yet rising houses prices are always seen as "great news!" by the media!...

Nobody really knows whats going to happen with house prices - they could keep rising or they could crash. If you are going to buy, try not to overstretch yourself (I know it wont be easy!)

davegtt

p.s. if I was in your position, if relocation wasnt possible. I would probably keep holding out for the next 3 years though. Could you possibly rent somewhere smaller leaving yourself with less rent to pay, gives a chance to save a deposit in a way. But saying that leaving it 3 years means youve paid £7800 a year out on accomodation that isnt yours.

Jaydee5

Just a thought, but when you are in the dubiously enviable position of buying your own, very expensive home, you also have the sole responsibility of maintaining it For those on high incomes this may not present a problem but for many, average folk it can be the straw that breaks the proverbial


Ane remember, when it's all paid for and you're elderly...our wonderful government may need you to sell it to pay for your long term care

Jay m A

iTrader: (2)

In your position I'd rather buy a 2 bed flat with garden access in a private residence, than invest in an area with housing association involved.

salsa-king

what a stupid reply.

salsa-king

you asked some real good question.

i wouldn't wantto do the 50/50 thing.
it meas your tied to paying rent to someone still... also if yu buy out the other 50% later... your still living in a shared ownership area!!
some are better than others, but some are pants.


why not see what the MAX you can borrow at the bank first. get a big deposit together too.

then have a look round what you can buy with that money.. least its ALL yours!!!!!

look on www.rightmove.co.uk to see whats on offer where you live.

Jaydee5

That sounds too much like common sense

_Meridian_

iTrader: (1)

Remind me again who sold off all the council houses?

TopBanana

Wow you're confident in the face of clear signs. Bought your first house recently by any chance?

TopBanana

What does it matter if you're paying someone else's mortgage? What matters is your financial situation in 5, 10 and 20 years time.

molko

and how can this be predictedf ?

swtmerce

Hahahahaha. New houses maybe not, but throwing money at chavs for every benfit under the sun (including housing) IS!

Pees me off that myself and my wife work hard and are about to start paying our first mortgage and one of the girls that works FOR my wife has just decided to go part time. Add in all her benefits because she has kids too, and she earns more than my wife now AND gets a free house to boot!

TopBanana

It's called economics.

molko

Its called guesswork, he may get made redundant next year, he may become too ill to work in 3 years time etc. How can he say what his financial situation maybe in 5,10,15 years time - anything could happen.

Its nothing to do with economics, so stop trying to be smart ****, you're impressing no one.