ChatterBank3 mins ago
50% shared ownership arrangements on flats
3 Answers
I sometimes see property advertised where you can buy part while the other half is owned by the developer.
Are these a good deal?
Are these a good deal?
Answers
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That's a bit like asking how long a piece of string is.
Depends what you mean by 'deal'. If the only alternative is to continue to rent, then for many people starting to own at least a share of one's own house is something they aspire to.
The reason whay they are more affordable (than buying 100% stake) is because the net cost per month of the 50% mortgage plus whatever 'rent' is payable to the owner of the other 50% stake is less than the cost of the 100% mortgage. So if one can't afford to buy 100% of the property by mortgage, it can work.
The flip-side (I didn't say downside) is that if property values escalate further, one makes less of a capital gain. Depending on the 'deal' the price of the rent paid on the non-owned part might increase over time (check the T&Cs).
Normally with these schemes, one has the right to buy more % of the equity at a later date - but at a higher than the current price, if the capital value has gone up in the meantime.
Depends what you mean by 'deal'. If the only alternative is to continue to rent, then for many people starting to own at least a share of one's own house is something they aspire to.
The reason whay they are more affordable (than buying 100% stake) is because the net cost per month of the 50% mortgage plus whatever 'rent' is payable to the owner of the other 50% stake is less than the cost of the 100% mortgage. So if one can't afford to buy 100% of the property by mortgage, it can work.
The flip-side (I didn't say downside) is that if property values escalate further, one makes less of a capital gain. Depending on the 'deal' the price of the rent paid on the non-owned part might increase over time (check the T&Cs).
Normally with these schemes, one has the right to buy more % of the equity at a later date - but at a higher than the current price, if the capital value has gone up in the meantime.
Not that I know of.
This is the most website I can point you in the direction of. There's plenty of mortgage advisors out there on shared equity, but they have a vested interest (they want your business). This site is part of central Government's efforts to support this. There are various topics on the left hand side you can scan and click onto. The Shared Equity Task Force might be interesting for you, however some of the material will be more strategic or technical in nature, and less practical. Hope that helps.
http://www.communities.gov.uk/housing/housings upply/affordablehousing/
This is the most website I can point you in the direction of. There's plenty of mortgage advisors out there on shared equity, but they have a vested interest (they want your business). This site is part of central Government's efforts to support this. There are various topics on the left hand side you can scan and click onto. The Shared Equity Task Force might be interesting for you, however some of the material will be more strategic or technical in nature, and less practical. Hope that helps.
http://www.communities.gov.uk/housing/housings upply/affordablehousing/
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