For anyone who has previously or currently has a property in the UK as part of the shared ownership scheme, what’s your experience been like and would you recommend it?
I am a single person looking to buy a 1 or 2 bed in London, somewhere reasonably close to central. First time buyer and I feel that really the only option I have is to go the shared ownership route, as it comes about the same cost if I rented. I’d like to know how’s the experience like when selling your share eventually after a couple of years?
You’ll probably only be able to sell your fraction via the organisation anyway, to whomever they line up, so you won’t be selling at full market price because the organisation’s goal is to get others into shared ownership at a discount, like they did with you.
You might also find your options for a mortgage or remortgage are very limited (expensive) because a lot of mortgage providers won’t want to risk not being able to foreclose on a property that’s shared.
Good luck with that dream of central London as a FTB though.
I was on a shared ownership scheme and thats how I bought my first property. I was able to get access to the same mortgages as non sahred ownership properties. Initially mortgages for shared ownership was pretty rare (or expensive) but I remortgaged a couple of times and got good rates with HSBC and Barclays.
The thing I dont like about Shared Ownership is that after a number of years of rent increases, it can actually get pretty expensive and the combined mortgage and rent is way above what just a mortgage on 100% of the property would be.
I dont live in London so accept this might be the only way to get on the property ladder but make sure you check carefully restrictions on increasing your share, remortgaging and selling. E.g the Landlord had to consent to my mortgage and remortgage and could in theory have said no!
Thanks for the input! Yeah that was one of my concerns as it looks ok when you look at costs initially, but I don’t know how much more expensive it will be down the line. I’ve heard horror stories about increase in service fees for the new builds, expensive remortgage options, and difficulty selling your shares of the property.
I’m also still trying to wrap my head around the leasehold, fleecehold and freeholds terminologies. It’s pretty overwhelming for someone undergoing through this process for the first time and I don’t want to be tricked into buying without fully understanding what it entails. It’s also hard to trust an agent to explain things, because their primary purpose is to sell and might intentionally leave out details of the cons of buying through shared ownership.
Good luck with that dream of central London as a FTB though.
More towards zones 3-4 actually, zone 1 is just too crazy it’s not worth it. From the sharetobuy.com site, there are properties ranging £1200-£1500 which is doable for my salary.
Hello - I have also done shared ownership and was able to purchase my property in fill using this scheme. I am in Dorset so again this could be different in London. My shared ownership was through a housing association - they weren’t allowed to raise the rents higher than 1% each year and often the service charge would fluctuate too depending on what they were doing so could go down. I ended up with an equal rent/service charge and mortgage payments. When I bought the full flat it was pretty much the same payments. It did mean that I was able to get a 2 bed home and get a lodger into to the second room so they were really paying the rent.
Staircasing was easy. I also extended the lease which again was easy for me - I’m not sure many people do that round here. It was about £5k for me to extend the lease which was on about 85 years at the time. Its very normal for flats to be lease hold unless the block has grouped together to buy the freehold. I think the fleecehold terminology was used for the new build homes that were sold as leasehold when the land should have been sold with them as a freehold. Just make sure that you have 95+ years on the lease or you will probably need to extend during your ownership which can be expensive.
I think that there will always be a market for people looking for just 50% of a property, especially in London, but as you say it could be a slower market if people are facing the same doubts as you. I would look into the company, maybe talk to others who are doing shared ownership with that company, if its a housing association then it should be a not for profit and they should be trying not to screw you over. Mortgages are likely to become more expensive but Ive never had issues due to shared ownership either.